By Earlene Chimoyo
Malawi and Zambia are set to pilot the Common Market for Eastern and Southern Africa (COMESA) Digital Retail Payment Platform (DRPP), which will enable cross-border trade using local currencies.
The pilot programme is expected to go live soon between the two countries.
The revelation comes as the Reserve Bank of Malawi is this week hosting the 46th Meeting of the Bureau of the COMESA Committee of Governors of Central Banks in Lilongwe.
Speaking during the opening of the meeting, the Assistant Secretary General of COMESA, Dev Haman, said that a fully integrated common market needs more than the removal of trade barriers.
“One of the fundamental constraints to expanding Intra-COMESA trade is the high cost, complexity and inefficiency associated with cross-border payments,” Haman said.
The Bureau provides oversight and policy guidance to COMESA’s two specialised monetary institutions, the COMESA Clearing House and the COMESA Monetary Institute, between sessions of the full Committee.
The COMESA Clearing House is developing the DRPP, which is an instant, low-cost cross-border retail payment system in local currencies.
According to the COMESA team, the platform is nearing its Friendly User Trials stage, ahead of live transactions between Malawi and Zambia.
Finance Minister Joseph Mwanamvekha said its high time countries in the regional market traded with each other without having to require dollars, hence the Regional Payment and Settlement System (REPSS) is the way to go as it allows nations trade in their respective currencies.
“REPSS and the ongoing development of the DRPP are very important in facilitating faster, more affordable cross-border payments in local currencies and advancing regional integration,” Mwanamvekha said.
Mwanamvekha has, however, called for policy and regulatory responsiveness, as the systems may give room to emerging risks such as cyber-attacks.
The REPSS is similar to the Pan-African Payment and Settlement System, which is being championed by the African Continental Free Trade Area secretariat as a powerful tool in propelling Africa’s trade among itself.
Currently, the REPSS has nine participants, and 1333 transaction with $98.2 million settled.
