It has emerged that Africa loses a staggering $5 billion annually, not to corruption, not to poor infrastructure, but simply to foreign exchange charges for trading within its own borders.
This simply means imagine a Ghanaian businesswoman buying goods from a supplier in South Africa. Instead of sending money directly from Accra to Johannesburg, her funds first make a detour through a bank in New York or London before landing in South Africa.
Along the way, fees pile up, profits shrink, and Africa’s hard-earned foreign reserves quietly drain into economies beyond its shores.
This is according to Dr. Tsotetsi Makong, Director for Coordination and Programmes at the AfCFTA Secretariat in Accra. Dr. Makong describes the situation as one of the silent injustices the continent faces in its own trading environment.
Speaking at the 2nd International Conference on Environment, Social, Governance (ESG) and Sustainable Development of Africa (ICESDA 2025) in Accra, Dr. Makong revealed that the African Continental Free Trade Area (AfCFTA) is working to change that through a new protocol on digital trade to reclaim Africa’s financial sovereignty.
“AFCFTA is seeking to correct some of the injustices. Under the AFCFTA, we have instruments. For example, we have a protocol on digital trade. One of the things that the protocol seeks to do is to ensure that when it comes to the payment systems, we can get a certain level of sovereignty in Africa,” Dr. Makong remarked.
He continued, “The continent loses $5 billion, $5 billion annually in forex exchanges. For you to trade with somebody in South Africa, your money has to actually go to the United States or Europe. You pay them to do transactions amongst yourselves. And we are saying we need to correct that. And this is the reality of where we live. The costs of doing trade in the continent are very high, and we are trying to correct that.”
At the heart of the solution is a continental payment system that allows African businesses to trade in their local currencies, cutting out unnecessary intermediaries.
This means a Kenyan importer can pay a Nigerian exporter directly, without their money taking a costly detour through Western banks.
If well and fully implemented, the digital trade protocol could revolutionize how trade is conducted across the continent, making intra-African commerce cheaper, faster, and more efficient. It aligns perfectly with AfCFTA’s goal of creating a single African market, boosting trade between member states, and fostering inclusive growth.
