In a bid to simplify trade transactions and ensure the safety of traders’ cash, the Common Market for Eastern Africa (COMESA) is set to introduce prepaid cards as a digital payment solution for cross-border trading within the region.
The current practice among many traders from COMESA member countries involves carrying substantial amounts of cash for trade transactions, especially when dealing with countries like Malawi.
Alternatively, they resort to using banks, but this can be fraught with challenges. Often, banking systems in the region do not seamlessly interconnect, resulting in high transfer costs that erode capital. Furthermore, this poses security concerns, particularly for female traders who may need to transport large sums of money.
Christabel IIiamupu, the Communications Manager at the COMESA Business Council Secretariat, reveals details of this innovative digital intervention. She explained that the prepaid card system aims to eliminate the need for cash and provide a secure and efficient means of conducting trade across borders.
To ensure the success of this initiative, the COMESA secretariat is collaborating with central banks in pilot countries, including Uganda, Tanzania, Malawi, Egypt, Zambia, Kenya, and Ethiopia. Their goal is to establish a seamless flow of funds when the prepaid card system is fully implemented. As a pilot project, the secretariat has already distributed free prepaid cards to cross-border traders at the Zambia-Malawi Livingstone border.
In addition to introducing the prepaid card system, COMESA is actively promoting regional trade through various initiatives. The Head of Common Markets for the Eastern South African region (COMESA), Benjamin Masila, emphasizes the importance of leveraging these initiatives to expand market access for traders.
He also highlights the theme of this year’s UMA trade fair, “Driving Manufacturing and Trade Efficiency through Digital Transformation and Innovation,” which aligns with COMESA’s vision for enhanced connectivity and digitization of trade systems.