Odinga’s Plan: Elevate African Currencies and Trade
Veteran opposition leader Raila Odinga has voiced strong support for the Pan-African Payment and Settlement System (PAPSS), citing its potential to enhance continental trade. Odinga, who is vying for the position of African Union Commission (AUC) Chairman in the upcoming election in February, views the PAPSS as a key element for improving trade across Africa. This system enables instant cross-border payments in local currencies, a move similar to the dedollarisation campaign previously advocated by President William Ruto.
Dedollarisation involves reducing reliance on the US dollar for international transactions and reserves. This shift aims to lessen the dependence on the dollar in global trade and finance, thereby decreasing the demand for it. Odinga highlighted the recent dollar shortages in some African nations, which have made trading challenging and unpredictable. He believes that PAPSS will not only cut transaction costs and delays but also lay the groundwork for an African Monetary Union.
According to Odinga, PAPSS will relieve the burden of acquiring hard currencies for transactions and bolster the role of African currencies. This initiative complements Africa’s goal of achieving a single currency to facilitate intra-continental trade. Odinga emphasized that realizing a fully functional African Continental Free Trade Area (AfCFTA) with a high level of intra-African trade and a seamless payment system is within reach.
He stressed that for deeper integration to occur, member states must commit to the ideals of supranational authority and the benefits of unity. Odinga underscored the need for serious discussions among member states to advance Africa’s collective self-reliance, solidarity, and development. He called for reducing both tariff and non-tariff barriers to boost internal trade.
Odinga’s vision for the AfCFTA includes creating a single market of over a billion consumers with a combined GDP exceeding $3 trillion. Studies indicate that fully implementing the AfCFTA could boost intra-African trade by 52% or $450 billion by 2035. However, achieving this will require coherent and efficient policies at all levels, focusing on promoting intra-African trade. Currently, over 80% of Africa’s cross-border payment transactions are processed abroad, resulting in an annual loss of $5 billion in transaction costs.
Odinga remains a leading contender for the AUC Chairmanship, facing only Djibouti’s Mahmoud Ali Youssouf as his main rival. As the August 6 deadline approaches, Somalia’s Fawzia Adam and Seychellois Vincent Meriton have withdrawn from the race, potentially increasing Odinga’s chances. Mauritius has also entered the race, adding a third candidate for the position. Somalia has chosen to support another candidate, and Adam has not commented on her withdrawal.
Health concerns have led Vincent Meriton to withdraw from the race, according to a statement from the Seychellois Foreign Ministry. With the candidate window closing, the competition now centers on Odinga and Youssouf. Both candidates submitted their documents to the African Union Legal Counsel earlier this week. There is speculation that Tanzania’s former Foreign Minister January Makamba may also enter the race, though this has not been confirmed.
The Eastern region will exclusively contest the AUC Chairperson’s seat under new rules that aim to rotate the position among regions and ensure diverse representation. The Foreign and Diaspora Affairs Ministry nominated Odinga due to his extensive experience in addressing continental challenges. They argue that Africa needs a visionary leader who can effectively tackle economic, environmental, and security issues.
The candidates have presented their vision statements and resumes, marking the initial step in their bid for leadership of the African Union Secretariat. Odinga’s agenda includes focusing on African integration, infrastructure development, and increasing intra-Africa trade. He also aims to enhance the AU’s financial independence and address the continent’s economic and agricultural transformation challenges.
Youssouf has pledged to leverage private sector participation to support the AfCFTA and improve infrastructure. He also plans to promote gender equality and environmental sustainability. Both candidates emphasize the need for climate action and strengthening AU institutions for peace and security. The AU will assess their proposals based on leadership skills, thematic expertise, and alignment with the AU Mandate and Africa’s Agenda 2063.
The selection process includes a televised debate known as MjadalaAfrika, where candidates will present their plans for leading the AU. All eight positions within the Commission are up for election, with each region allotted slots based on agreed principles of rotation. Countries under AU sanctions are ineligible to submit candidates.
