Nigeria and other African counties must learn how to trade without dollar to grow cross-border business, the chief executive officer(CEO) of Cellulant, Akshay Grover said.
Grover, who spoke during a media parley at the company’s Lagos office on Thursday, noted that this will equally allow cross-border payments in Africa to grow bigger, better, and faster.
Cellulant is an innovative fintech driving financial inclusion in Africa and founded on a deep belief in the power of building a payments ecosystem that creates seamless interoperability across the continent.
He explained that, having to first convert African currencies into dollars to trade is inefficient and a disincentive to trade.
According to him, “when I want to change Ghanaian Cedi to Naira, I first need to change Cedi to US dollar then US dollar to Naira. That’s the most inefficient way of converting our currencies. What we could do is enable trade without converting to the US dollar. This is a huge opportunity for cross-border trade.”
Grover added that, getting rid of dollars for trade will also help tackle the ‘dollar liquidity problem. Why is there so much demand for dollars? Why do I need to convert to the dollar to do business?’
He noted that, though unfortunate, the ongoing Russia-Ukraine war has led to the benefit of using local currencies for items previously traded in dollars.
“People are now buying oil in local currencies, which never happened, but it is now happening because of the Russia-Ukraine war,” Grover explained.
The CEO said, it was time financial regulators in Africa, particularly central banks, moved to resolve the problem of dollar dependence to boost cross-border payment on the continent.
“For this, you need a little cooperation. Everyone needs to come to the table. And this has to happen at the Central Bank or the government level, not Cellulant’s. Maybe it might not happen soon for all of Africa, but we can start building bridges.
“To some extent, Francophone African countries have tried to do that by trying to create one currency- the CFA – and it’s helped them quite a bit. So, I think the move has started, but how quickly we get onto that road will determine how big this could be in the next two, three years,” he pointed out.
Grover explained that Cellulant was already playing in the cross-border payment space by hosting a lot of intra-Africa traffic through its self-built infrastructure.
