Latest news with #Nairobi
Malay Mail
3 hours ago
- Business
- Malay Mail
Africa pioneers low-cost, non-dollar payment systems, defying Trump's de-dollarisation threats
PAPSS payment system allows trade settlement in local currencies Experts says move aims of lowering trade costs South Africa using G20 presidency to advance local payments US President Trump warns against de-dollarisation efforts NAIROBI, June 20 — Africa's push for local currency payments systems — once little more than an aspiration — is finally making concrete gains, bringing the promise of less costly trade to a continent long hobbled by resource-sapping dollar transactions. But efforts to move away from the dollar face strong opposition and the threat of retaliation from US President Donald Trump, who is determined to preserve it as the dominant currency for global trade. The move by Africa to create payments systems that do not rely on the greenback mirrors a push by China to develop financial systems independent of Western institutions. Countries like Russia, which face economic sanctions, are also keen for an alternative to the dollar. But while that movement has gained a sense of urgency due to shifting trade patterns and geopolitical realignments following President Trump's return to the White House, African advocates for payment alternatives are making their case based on costs. 'Our goal, contrary to what people might think, is not de-dollarisation,' said Mike Ogbalu, chief executive of the Pan-African Payments and Settlements System, which allows parties to transact directly in local currencies, bypassing the dollar. 'If you look at African economies, you'll find that they struggle with availability for third-party global currencies to settle transactions,' he said. Africa's commercial banks typically rely on overseas counterparts, through so-called correspondent banking relationships, to facilitate settlements of international payments. That includes payments between African neighbours. That adds significantly to transaction costs that, along with other factors like poor transport infrastructure, have made trade in Africa 50 per cent more expensive than the global average, according to the UN Trade and Development agency. It is also among the reasons so much of Africa's trade — 84 per cent, according to a report by Mauritius-based MCB Group — is with external partners rather than between African nations. 'The existing financial network that is largely dollar-based has essentially become less effective for Africa, and costlier,' said Daniel McDowell, a professor at Syracuse University in New York specialising in international finance. A man counts Nigerian naira notes in a market place as people struggle with the economic hardship and cashflow problems ahead of Nigeria's Presidential elections, in Yola, Nigeria, February 22, 2023. — Reuters pic Homegrown systems According to data compiled by PAPSS, under the existing system of correspondent banks, a US$200 million (RM851 million) trade between two parties in different African countries is estimated to cost 10 per cent to 30 per cent of the value of the deal. The shift to homegrown payments systems could cut the cost of that transaction to just 1 per cent. Systems like PAPSS allow a business in one country, Zambia for example, to pay for goods from another like Kenya, with both buyer and seller receiving payment in their respective currencies rather than converting them into dollars to complete the transaction. Using currencies like the Nigerian naira, Ghanaian cedi or South Africa's rand for intra-Africa trade payments could save the continent US$5 billion a year in hard currency, Ogbalu told Reuters. Launched in January 2022 with just 10 participating commercial banks, PAPSS is today operational in 15 countries including Zambia, Malawi, Kenya and Tunisia, and now has 150 commercial banks in its network. 'We have also seen very significant growth in our transactions,' Ogbalu said, without providing usage data. The International Finance Corporation, the World Bank's private sector lending arm, has, meanwhile, started issuing loans to African businesses in local currencies. It views the switch as imperative for their growth, relieving them from the currency risks of borrowing in dollars, said Ethiopis Tafara, IFC's vice-president for Africa. 'If they are not generating hard currency, a hard-currency loan imposes a burden that makes it difficult for them to succeed,' he said. Africa's push for local currency payments systems is finally making concrete gains, bringing the promise of less costly trade to a continent long hobbled by resource-sapping dollar transactions. — Picture By Choo Choy May Geopolitics and the Trump factor Africa's campaign to boost regional payments systems has found a platform at the Group of 20 major economies, with South Africa leading the charge as holder of the G20's rotating presidency. It held at least one session on boosting regional payments systems when South Africa hosted a meeting of G20 finance ministers and central bank governors. And South Africa wants it to follow up the talk with concrete actions. The next meeting of G20 finance officials is scheduled for mid-July. 'Some of the most expensive corridors for cross-border payments are actually found on the African continent,' Lesetja Kganyago, South Africa's central bank governor, told Reuters during a G20 meeting in Cape Town in February. 'For us to function as a continent, it's important that we start trading and settling in our own currencies.' Talk of moving away from the dollar — either for trade or as a reserve currency — has drawn aggressive reactions from President Trump, however. After Brics — a grouping of nations including Russia, China, India and Brazil along with Africans like South Africa, Egypt and Ethiopia — weighed reducing dollar dependence and creating a common currency, Trump responded with threats of 100 per cent tariffs. 'There is no chance that Brics will replace the US Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs, and goodbye to America!,' he wrote on Truth Social in January. In the months since, Trump has demonstrated his willingness to use tariffs to pressure and punish allies and foes alike, a strategy that has upended global trade and geopolitics. No matter its intentions in moving to more local currency transactions, Syracuse University's McDowell said Africa will struggle to distance itself from more politically motivated de-dollarisation efforts, like those led by China and Russia. 'The perception is likely to be that this is about geopolitics,' he said. — Reuters
Bloomberg
3 hours ago
- Politics
- Bloomberg
Kenyan Tinderbox Faces Protest-Anniversary Test
Welcome to Next Africa, a twice-weekly newsletter on where the continent stands now — and where it's headed. Sign up here to have it delivered to your email. The sight of hundreds of hooded motorcyclists clubbing and whipping mostly Gen Z demonstrators in Nairobi this week took protests in the Kenyan capital to a dangerous new level.
Bloomberg
4 hours ago
- Politics
- Bloomberg
Why Kenyans Are Back on the Streets: Protests, Corruption, and a Crisis of Trust
A year since deadly protests against the Kenyan government saw more than 60 people killed, Kenyans are again taking to the streets to protest police brutality. These protests, triggered by the death of a kenyan activist in police custody, come as the IMF arrive in the country to assess Kenya's attempts to tackle corruption. On this week's episode East Africa Bureau Chief Helen Nyambura joins Jennifer Zabasajja to discuss what's behind these new protests, and whether President Ruto can actually tackle corruption and do a deal with the IMF to turn the economy around. For more stories from the region, subscribe to the Next Africa newsletter here
The Sun
4 hours ago
- The Sun
Major airline launches new UK flights to popular African holiday destination – and breaks are just as cheap Spain
A MAJOR airline has launched new flights to a popular African holiday spot. Starting next month, holidaymakers will be able to venture further afield and relax by the Indian Ocean for the same cost as a trip to Spain. 1 On 2 July 2025, Kenya Airways will debut three direct flights from London Gatwick to Nairobi meaning travellers will have two nonstop flight options into London. The new Gatwick route will operate at night three times a week - on Mondays, Thursdays, and Saturdays - complementing Heathrow's existing schedule. And for just over £1,000 per person Brits can take advantage of Kenya's stunning landscapes at the luxury hotel, Pinewood Resort and Spa set along the shores of Diani Beach, Papillon Lagoon Reef. Nestled along the serene southern Mombasa coastline the resort overlooks the breathtaking Indian Ocean. The hotel is advertised as an ideal escape for couples seeking romance or families in search of a quiet retreat. It is fit with four eateries and three bars, as well as an on-site gym and tennis court. The hotel also offers spa treatments and a personal chef to guests staying in the suite. A week's stay at the resort costs £1,189 including return flights and transfers. This is based on two sharing a deluxe room on a half board basis. Bookings made before 30 June will receive a £150 discount. This comes as Kenya was named as"one to watch" holiday destination by TUI. Five stunning, little-known holiday destinations Kenya is one of the few places in the world where holidaymakers can spot the big five in their native habitat. There are other reasons to visit the East African nation, including its scenic coastline along the Indian Ocean, the cultures of its local tribes and its warm climate. Neil Swanson, TUI UK&I Managing Director, said: "Kenya is an incredible destination offering breathtaking landscapes, diverse wildlife, and rich culture making it a truly unique place to explore. "Since re-launching Kenya as a destination in 2023, it's no surprise demand has been booming and continuing to soar. "Our Highlights of Kenya tour has seen an outstanding +236 per cent uplift for Winter 2024/25 and +151 per cent for Summer 2025. "Our new A Taste of Kenya Safari is already seeing strong sales for both seasons. "This itinerary offers a more relaxed safari experience, with additional beach time to unwind at the end of the adventure. "It's clear customers have a real appetite for this destination, so we are currently exploring new ways to enhance our offering such as private safaris or immersive lodge experiences, so it's definitely a destination to watch."
Reuters
8 hours ago
- Business
- Reuters
Kenyan shilling flat Vs dollar
NAIROBI, June 20 (Reuters) - The Kenyan shilling was flat against the dollar on Friday from the previous session, data from the London Stock Exchange Group (LSEG) showed. At 0717 GMT commercial banks quoted the shilling at 129.00/129.50, same level as Thursday's close.
