In a bold move aimed at strengthening the local economy and fostering regional trade, Kenya’s President William Ruto has called for African nations to abandon the U.S. dollar for trade settlements. During a recent speech, President Ruto garnered applause from lawmakers as he expressed Kenya’s intention to join BRICS and promote the use of the Kenyan Shilling as the preferred tender for cross-border transactions within Africa.
President Ruto clarified that the proposal is not aimed at opposing the U.S. dollar but rather at emphasizing the importance of native currencies in bolstering local economies. While suggesting that the U.S. dollar should still be used for transactions with the United States, President Ruto stressed the need for African countries to conduct trade using their respective local currencies.
One of the key developments supporting this shift is the African Export-Import Bank (Afrexim) building a platform to facilitate settlements in local currencies among African traders. This initiative could potentially exclude the U.S. dollar from intra-African trade settlements, reducing dependence on external currencies.
President Ruto highlighted the inconvenience of relying on the U.S. dollar for trade between African countries. He emphasized that the Afrexim Bank’s mechanism enables traders to engage in goods and services exchanges while having payments settled in local currencies. By championing this pan-African payment and settlement system, Kenya aims to promote freer trade within the continent.
The President’s remarks have generated significant interest and debate, particularly within the context of Kenya’s aspirations to join BRICS (Brazil, Russia, India, China, and South Africa). This move positions Kenya as an advocate for de-dollarization and further strengthens its ties with emerging economies.
While the proposal to ditch the U.S. dollar for African trade settlements is still in its early stages, President Ruto’s call reflects a growing sentiment among African nations to prioritize local currencies and reduce dependence on external monetary systems. If successfully implemented, this shift could reshape regional trade dynamics and contribute to the economic development of African countries.
As Kenya takes a decisive step toward joining BRICS and promoting native currencies, the global financial community eagerly watches to see how this development will unfold and its potential impact on the future of international trade and monetary systems.
Written by Agbo Obinnaya.
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