African cross-border trade faces high costs and payment friction

African businesses face significant financial and operational hurdles in cross-border trade due to inefficient payment systems and linguistic divides. Current transaction processes often require routing payments through foreign correspondent banks in Europe or North America, which drains foreign exchange reserves and adds friction fees of 2% to 5%. These delays and costs are compounded by foreign exchange volatility and liquidity constraints, particularly in markets like Nigeria.

Linguistic barriers between English-speaking nations and Francophone neighbors further isolate potential business partners. This lack of integration contributes to low intra-African trade volumes, which currently sit between 15% and 18%, significantly lower than the intra-regional trade rates seen in Europe and Asia.

In response to these challenges, the payment platform Oneremit has expanded its operations to serve over 1,000 businesses, having processed more than $200 million in outbound commercial transactions to help mitigate regional payment friction.