Posted on August, 19, 2024 at 08:31 am
A new report from Duplo, a leading provider of payment, spending, and vendor management solutions for African businesses, has highlighted the potential of payment technology to simplify cross-border trade in Africa.
According to the report, cross-border trade in Africa is facing significant challenges, including high transaction costs, lengthy processing times, and limited access to payment systems.
However, the adoption of innovative payment technologies is expected to address these challenges and enhance the efficiency of cross-border trade.
The report, titled “The State of Cross-Border B2B Payments in Africa and its Impact on Trade,” is the third in Duplo’s annual series of business-to-business payment reports.
It noted that traditional banking channels still dominate large-value formal cross-border B2B payments, despite high transaction fees and lengthy processing times.
However, it added that new payment technologies were emerging, offering faster, cheaper, and more secure transactions.
Commenting on the report, the CEO and co-founder of Duplo, Yele Oyekola, said, “As businesses navigate new opportunities and challenges that come with changing global trade patterns, there is an increasing need for efficient and cost-effective cross-border payment solutions.
“Our report highlights the critical role technology can play in overcoming traditional banking limitations. We believe that by embracing these new technologies, businesses can unlock the full potential of intra- and extra-African trade, driving economic growth across the continent.”
Further, the report revealed that intra-African trade reached an estimated $193bn in 2022, accounting for 13.8 per cent of total African trade.
It noted that the figure may underestimate the true scale of intra-African commerce, as a significant portion of cross-border trade remained informal and underreported.
The report highlighted that 40 per cent of cross-border trade payments between East and West African countries were conducted in cash, with underreporting ranging from 12 per cent to 76 per cent.
Source: Punch