Kenya's President Calls for African Nations to Embrace Local Currencies, Considers Joining BRICS

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  • President Ruto Advocates for Ditching the U.S. Dollar for Cross-Border Trade

Nairobi, Kenya - In a bold move that could reshape international trade dynamics, Kenya's President William Ruto has delivered a speech advocating for African countries to shift away from the U.S. dollar and embrace local currencies for cross-border transactions. The President's remarks were met with applause from lawmakers, signaling a growing desire within Kenya to assert economic independence and foster regional trade partnerships.

During his address, President Ruto expressed his belief that the use of local currencies, such as the Kenyan Shilling, would strengthen the local economy and promote trade between African nations. He argued that there was "no reason" for African countries to rely on the U.S. dollar when conducting transactions among themselves.

"We have no reason to pay with the U.S. dollar when trading among African nations," stated President Ruto, emphasizing the importance of utilizing the Kenyan Shilling as the preferred tender for cross-border trade within the continent. However, he clarified that the U.S. dollar would still be used for transactions involving the United States.

While President Ruto expressed support for promoting native currencies, he also made it clear that Kenya was not against the U.S. dollar. Rather, the aim was to establish a more flexible and efficient trade environment where African countries could conduct business using their respective local currencies.

To facilitate this transition, the President highlighted the efforts of the African Export-Import Bank (Afrexim), which is developing a platform that would enable traders in Africa to settle payments in local currency. This move could potentially eliminate the need for the U.S. dollar in intercontinental trade settlements involving African countries.

President Ruto emphasized the significance of this development, stating, "Today, we are saying the African Export-Import Bank has given us a mechanism where traders in our continent can trade in their goods and services, and the bank will settle payments in local currency. That is why Kenya champions the pan-African payments and settlement systems facilitated by our own institution, the Afrexim Bank."

The President cited examples of trade between Kenya and Djibouti, highlighting the current reliance on the U.S. dollar for transactions. He argued that such dependence was unnecessary, as the establishment of regional payment systems would enable countries to conduct trade using their own currencies, fostering economic cooperation and reducing dependency on external currencies.

Kenya's inclination to embrace local currencies and explore alternatives to the U.S. dollar has drawn attention, with speculation arising about the country's potential interest in joining BRICS (Brazil, Russia, India, China, and South Africa). While no official announcement has been made regarding Kenya's BRICS membership, President Ruto's remarks indicate a willingness to explore new economic alliances and strengthen regional trade relationships.

As President Ruto's vision gains traction within Kenya, the implications of adopting local currencies for cross-border trade within Africa remain to be seen. The proposed shift could have far-reaching consequences, challenging the dominant role of the U.S. dollar and fostering a more diversified and self-reliant economic landscape within the continent.