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Overcoming Obstacles: How Africans Navigate Cross-Border Payments

Cross-border payments in Africa can be challenging due to fluctuating exchange rates and high costs. In fact, cross-border payments within Africa are among the most expensive in the world, with an average cost of 8.9% of the transaction value in 2020, compared to the global average of 6.8%. These costs result from high operational expenses, currency conversion fees, and compliance costs. Additionally, since almost 85% of employment in Sub-Saharan Africa belongs to the informal sector and many people lack access to formal financial channels, cross-border payments become nearly impossible. Despite these difficulties, opportunities and solutions are available to improve cross-border payments in Africa.

Cash is king (for now)

Although cash is still the most commonly used payment method in Africa, there has been a growing trend towards adopting cryptocurrencies, particularly among the younger generation. Countries such as Nigeria, South Africa, Tanzania, and Kenya have experienced significant adoption rates as people search for alternative financial options due to inadequate infrastructure and a preference for alternative storage and transfer methods.

In recent years, cryptocurrencies have offered a cost-effective and secure way to transfer funds within diasporas from a cross-border payment perspective, avoiding the high fees and delays typically associated with traditional financial institutions.

Many countries in the region are grappling with rising inflation and debt. As a result, cryptocurrency has become an appealing means of storing value, safeguarding savings, and gaining financial independence. For example, in June 2022, Ghana’s inflation reached its highest level in two decades, at 29.8%. Due to the lack of financial opportunities, many Ghanaians began using Bitcoin.

Cryptocurrencies offer a more reliable option compared to the average 14.47% inflation rate observed in Sub-Saharan Africa in 2022, thanks to their relatively stable supplies and consistent performance. Stablecoins such as USDC and USDT are becoming increasingly popular, enabling Africans to access USD, a notoriously difficult task in many African countries, therefore bolstering cryptocurrencies as a sound payment method.

Other African countries, such as Nigeria, Kenya, and South Africa, are facing similar challenges, which has led to a notable increase in the use of cryptocurrencies at a grassroots level.

Adoption and restrictions of cryptocurrency in African countries

And while Africans themselves are embracing crypto, governments are split, with some adopting the technology and others imposing restrictions. The Financial Sector Conduct Authority (FSCA) in South Africa has revealed its plan to issue 50 licenses to Crypto Asset Service Providers (CASPs) during the first quarter of 2024. However, some African countries such as Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of Congo have imposed restrictions or prohibited the use of cryptocurrency. Zimbabwe has instructed all banks to cease processing crypto transactions, and Liberia has ordered a local crypto startup to halt its operations.


The challenges encountered in cross-border payments within Africa have hindered economic growth and financial inclusion. However, the emergence of blockchain technology and the growing use of cryptocurrencies, particularly among the youth, are changing the game. Despite differences in government policies, the widespread acceptance of cryptocurrencies among various African countries demonstrates a willingness to overcome financial barriers. Cryptocurrencies are perceived not just as a viable alternative to traditional payment methods but also as a means to promote financial freedom and independence.