Africa’s push toward deeper regional trade integration continues to run into a stubborn obstacle: moving money across the continent remains slow, fragmented, and expensive. Despite years of fintech innovation and billions of dollars flowing into African startups, cross-border payments across Africa are still heavily dependent on foreign currencies, fragmented regulatory systems, and infrastructure that was never designed primarily for intra-African trade. According to Naco Bolote, the continent’s biggest payments challenge is ultimately fragmentation, not just of payment rails, but also of policy, governance, and financial systems. “Africa is crying out for unity,” Bolote says, arguing that the continent still lacks the seamless financial infrastructure needed to support meaningful intra-African trade. He notes that sending money between African countries often still requires routing transactions through international financial hubs such as London or New York because local systems remain poorly interconnected. The problem becomes even more complex because much of Africa’s trade still depends on the US dollar as an intermediary currency. That reliance creates multiple pressures simultaneously. Dollar liquidity remains scarce in many African markets, foreign exchange controls differ significantly between countries, and transaction costs remain high. Bolote says these realities continue to slow both business payments and remittances across the continent. At the same time, geopolitical shifts are beginning to reshape how African policymakers and financial institutions think about financial sovereignty. Bolote argues that relying on payment rails and currencies controlled outside Africa creates vulnerabilities for the continent’s economies, especially at a time when countries globally are becoming increasingly sensitive about control over financial infrastructure. “It means you can easily be cut off the rails,” he says, referring to the global payment systems many African transactions still depend on. These challenges have helped fuel growing interest in alternative payment technologies such as stablecoins. Dollar-backed stablecoins are increasingly being explored as a way to reduce transfer costs, improve settlement times, and ease liquidity shortages in African markets. But Bolote believes they only partially solve the continent’s long-term problem because they remain tied to foreign currencies. Still, he sees major opportunities for innovation. Botswana, he argues, could potentially position itself as a regional hub for stablecoin innovation because of its relatively liberal regulatory environment around currency management. Longer term, Bolote believes Africa could eventually develop digital currencies backed by African commodities and designed specifically for regional trade. “My vision is really how do we create a stablecoin that is fundamentally African, designed for Africa, and backed by assets that we find in Africa,” he says. The conversation around cross-border payments also increasingly overlaps with the rise of African fintech startups. Over the last decade, fintech has attracted the largest share of venture capital funding on the continent, with startups attempting to solve problems ranging from remittances and settlement to liquidity management and compliance. But Bolote believes many of these companies are still building on top of global infrastructure that Africa does not fully control. Rather than replacing banks, he sees the future of African payments being driven by collaboration between banks, fintechs, mobile money operators, and regulators. “The entire problem is going to be solved by even banks themselves collaborating, fintechs collaborating with fintechs, fintechs collaborating with banks,” he says. That collaboration is becoming increasingly important as remittances continue to play a larger role in African economies. Africa received more than $100 billion in remittance inflows in 2024, with diaspora transfers contributing significantly to household income and foreign currency inflows across several economies. Yet sending money into Africa remains among the most expensive remittance corridors globally. Bolote believes the next phase of innovation will focus on making transfers more seamless by connecting banks, mobile wallets, fintech platforms, and payment providers into integrated systems that allow funds to move instantly across borders. He also expects the African Continental Free Trade Area (AfCFTA) to accelerate pressure for cheaper and faster payment infrastructure as trade volumes between African countries increase. For Bolote, however, the continent’s payments problem ultimately comes back to a deeper issue: trust. “Why don’t we trust each other’s currencies?” he asks. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit techaways.substack.com
