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| Emerging Payment Solutions Set to Transform Africa's Cross-Border B2B Transactions and Trade Growth: Insights from Duplo's Latest Report Image credit: Duplo |
A recent report from Duplo, a prominent provider of payment, spend, and vendor management solutions for African businesses, highlights the transformative impact of changing global trade patterns and the rise of new payment solutions on cross-border B2B payments in Africa. These developments are expected to unlock significant growth in both intra- and extra-continental trade.
The Report Overview
Titled “The State of Cross-Border B2B Payments in Africa and its Impact on Trade,” this report is the third annual B2B payment report released by Duplo. It explores various critical aspects such as the key drivers of intra- and extra-African trade, the current state of cross-border B2B payments, and future outlooks for the continent.
Key Findings in Numbers
According to the report, intra-African trade was valued at approximately $193 billion in 2022, representing 13.8% of Africa's total trade. However, this figure is believed to underestimate the actual scale of intra-African commerce due to the substantial amount of informal and underreported cross-border trade. The report further indicates that 40% of cross-border trade payments between East and West African nations are conducted in cash, with underreporting rates ranging from 12% to 76%.
Challenges and Solutions
A significant challenge highlighted in the report is the lack of interoperability between payment systems across the continent. Out of 32 instant payment systems in Africa, fewer than half are interoperable. The Pan-African Payment and Settlement System (PAPSS), though in its early stages, is identified as a critical initiative for improving the efficiency and formalization of cross-border transactions.
Global Trade Context
Africa's share in global trade has remained stagnant at 3%, despite shifting global trade dynamics, including the rise of Asian economies and a new multi-polar world order led by the US and China. These changes present both challenges and opportunities for African businesses, particularly in enhancing transparency, reducing transaction costs, and increasing trade volumes through advanced B2B cross-border payment solutions.
Expert Insights
Yele Oyekola, CEO and co-founder of Duplo, emphasized the importance of efficient and cost-effective cross-border payment solutions amidst evolving global trade patterns. He stated, "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."
Accessing the Report
For those interested in gaining deeper insights into the state of cross-border B2B payments in Africa, Duplo's report, "The State of Cross-Border B2B Payments in Africa and its Impact on Trade," is available for free download on their official website.
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