SA's G20 could help shape a prosperous future for Africa

Focus should be on securing financial, technological support

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AS THE first African country to assume the G20 Presidency, South Africa has a unique opportunity to demonstrate leadership by prioritising African issues at the global stage.

A key focus should be securing greater financial and technological support for implementing the African Continental Free Trade Area (AfCFTA). Currently, intra-African trade is only 16%, highlighting the potential for growth through stronger trade integration. By 2035, boosting trade could increase Africa's GDP by up to $500 billion, creating 30 million jobs and lifting millions out of poverty.

Additionally, enhanced trade would stimulate industrialisation, enabling African nations to transition from raw material exports to more diversified, higher-value manufacturing hubs. This shift would promote economic growth and strengthen Africa's global competitiveness, reducing its reliance on external markets and improving its bargaining power in international negotiations.

Through effective leadership, South Africa can help shape a prosperous future for the continent.

However, a significant barrier to boosting intra-African trade is the absence of a robust, African-led payment system capable of efficiently handling cross-border transactions. Over 80% of intra-continental payments currently rely on the SWIFT system, which routes transactions through intermediary banks in Western countries.

This process causes significant delays and inflates transaction costs. African businesses lose an estimated $5 billion annually in transactions, according to Afreximbank. These high costs stem largely from currency conversion fees, ranging from 3% to 6% per transaction, and other service charges.

Some regional mechanisms, such as the SIRESS in Southern Africa and the CFA Franc Zone in West Africa, offer partial solutions.