Abstract

This paper examines the strategic role of central bank-issued currencies, particularly Central Bank Digital Currencies (CBDCs), in improving cross-border transactions and strengthening monetary coordination across Africa. As central banks increasingly explore digital forms of their national currencies, CBDCs offer a distinct opportunity to streamline cross-border payments, enhance monetary policy alignment, and expand financial inclusion. These developments hold considerable promise for unifying disparate national financial systems, stabilizing exchange rates, and reducing dependence on foreign currencies in intra-African trade. This is especially relevant in a global environment with increased trade protectionism and established tariff regimes. Our analysis indicates that CBDCs could foster greater interoperability among payment systems, significantly boost the efficiency and transparency of cross-border transactions, and contribute to developing a unified and resilient digital economy throughout the continent. Ultimately, CBDCs can be powerful tools for achieving macroeconomic convergence, thereby supporting Africa’s broader regional integration goals. The paper concludes with specific policy recommendations on governance, interoperability, and currency design, all aimed at leveraging central bank currencies for long-term regional stability and sustainable economic growth.

Keywords: Central bank digital currencies, Cross-border payments, Africa, Integration