Many African governments are actively promoting decooperativeness, making local currency the norm and limiting the use of the US dollar. Just recently, Nigeria announced that oil settlements must be made in local currency, naira, rather than in US dollars. Tanzania had banned US dollars in local deals and was forced to use only shillings for the public. Kenya is also implementing stricter forex rules to limit the use of greenbacks on local exchanges.
African countries such as Niger, Mali and Burkina Faso are also considering dehydrating the withdrawal rate by launching a common currency and taking on the US dollar. However, despite the three countries’ active efforts towards forming currency, the idea has not seen the light. It’s been two years since they struggled to come up with a common currency that could work for everyone.
African governments are pushing for decooperative, but the people trust the US dollar
Government de-cooperative rhetoric is flattened as the public still uses US dollars for local transactions. Even after local currency performed better than USD this year, many still prefer greenbacks over local currency. Development has put the government in place as the dollar remains king despite multiple attempts to uproot it. The public is attracted to the stability of USD and its global acceptance, and encourages confidence in the currency.
Even USD-backed stubcoins are Africa’s most preferred payment type for cross-border settlements. “Despite non-repetitive rhetoric (Africa), most people and institutions view the US dollar as a king and safe haven as a property compared to local African currencies. This is based not only on feelings, but on relative stability and global acceptance. Valr co-founder Badi Sudhakaran said.
