The Common Market for Eastern and Southern Africa (COMESA) has launched a Digital Retail Payments Platform (DRPP) designed to enhance cross-border trade among its 21 member states. This initiative allows businesses to conduct transactions directly in local currencies, reducing dependency on foreign exce and minimizing currency volatility risks.
The DRPP prioritizes instant, inclusive, and affordable transactions, with costs aimed to remain under 3%. It stands to benefit micro, small, and medium-sized enterprises (MSMEs)—which account for 80% of businesses and 60% of employment in the region—by addressing challenges posed by existing high-cost and insecure cross-border payment systems.
The pilot phase has begun trials between Malawi and Zambia, marking progress toward regional economic integration. This initiative is in collaboration with two unnamed digital financial service providers and a foreign exce provider.
Kenya’s Trade Minister, Lee Kinyanjui, has underscored the platform’s transformative potential by stating it enables cross-border trade settlements in local currencies for the first time within COMESA, removing the need for scarce foreign currency.
The DRPP is part of Kenya’s broader strategy to enhance regional trade integration, with President William Ruto announcing significant investments in trade finance institutions, including a $100 million boost for the Trade and Development Bank and a $50 million increase for the African Export-Import Bank. These investments aim to strengthen home-grown financial institutions to foster sustainable development and intra-regional trade.
The DRPP is expected to substantially lower transaction costs and enhance the efficiency of cross-border trade, promoting economic growth and financial inclusion while supporting MSME development across member states.
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Wow, this digital payment system by COMESA sounds promising! Cant wait to see if it boosts economic growth in Africa.
Im not convinced digital payments will work in all COMESA countries. What about those without reliable internet access?
I wonder if this digital payment system will truly benefit all member countries of COMESA or just the more developed ones. What do you think?
I wonder if this will really boost trade or just create more complications. Exciting yet cautious!