The East African Community (EAC) member-states and Comesa are looking to introduce a digital payment system for informal cross-border trade within the Comesa bloc, with Tanzania, Kenya, Uganda and Rwanda already in the pilot phase.
The digital payment system seeks to supersede similar systems adopted in the bloc to avoid disputes arising from overlapping systems.
A public-private partnership dialogue is already ongoing to discuss a draft model policy for the Comesa platform. This is specifically designed to benefit micro, small and medium-sized enterprises (MSMEs) under the bloc’s Digital Financial Inclusion Project.
The platform further aims to integrate informal traders into formal markets through better access to digital finance systems.
The common regional scheme aims to facilitate bottom-of-the-pyramid informal traders (domestic and cross-border) to carry out transparent, affordable and secured digital transactions.
Other countries in the pilot were Ethiopia, Malawi, Zambia, Mauritius, and Egypt.
Apart from their national policies, Kenya, Uganda, Tanzania, and Rwanda also operate under the EAPS (East African Payment System).
The Central Bank of Kenya’s 2018 figures show that the EAPS handles $681 million worth of transactions every year.
Under EAPS, transactions are cleared through the respective central banks using SWIFT, while local banks are required to maintain pre-funded accounts in all local currencies while the central banks facilitate settlements.