Kenyan President William Ruto proposes a new system to free himself from dependence on the US dollar
In Kenya, President William Ruto recently made a brave and incredible statement. In this famous speech, he alluded to the transactions that take place between countries. For example, Kenya wishing to carry out commercial transactions or exchange services with Djibouti is obliged to do so using the US dollar. In other words, Kenya must first convert its currency into dollars before it can buy goods or services from Djibouti, Uganda or other South African countries.
This raises a number of questions. Why do the United States or the dollar have anything to do with transactions in Africa? It makes no sense. The main reason the U.S. has always been strong in monetary terms is that, after World War II, the U.S. dollar became the world’s currency. It has become a form of imperialism in which many African countries and the rest of the world are forced to use the dollar for their transactions.
An alternative system to the U.S. dollar
The Chairman is therefore proposing a new system called PAPS, the Pan-African Payment and Settlement System. It is an advanced financial infrastructure linking African banks, payment service providers and other financial players. This system will enable instant, secure payments between African countries, eliminating the need to use the dollar.
Read more: Kenya’s president delivers a courageous speech for a free and respected Africa
PAPS offers instant payments from authorizing officers to beneficiaries in their own local currency, without having to use the dollar. This simplifies the historical complexities of cross-border payments in Africa, and opens up vast economic opportunities for all stakeholders.
It is important to note that several African banks, including the Bank of Ghana, the Central Bank of The Gambia, the Central Bank of Liberia, the Bank of Guinea and the Bank of Sierra Leone, have already implemented the PAPS system.
In the past, Mohammed Gaddafi had proposed something similar. He wanted Africans to break away from Western monetary systems with their pressures and sanctions and use a gold-based currency called the dinar. Unfortunately, he was demonized and this led to the destruction of Libya. Today, the people of Libya are lost without this president.
The rise of the US dollar and its consequences
What’s more, the US dollar became the world’s currency after the Second World War, establishing the United States as a stable country. In the 1970s, President Nixon negotiated with Saudi Arabia for countries buying their oil to do so in dollars. This gave rise to the “Petrodollar”, where the value of the dollar is closely linked to that of oil, and the dollar is now at a balanced level. Then President Nixon detached the dollar from gold, allowing the U.S. to print as much money as it wanted, creating inflationary problems.
Many countries that have refused to comply with U.S. demands have been sanctioned, preventing them from using dollar-based international infrastructures. However, countries such as Russia and China have developed their own systems to avoid these sanctions. Countries like Kenya and Libya are still prey for Westerners.
Towards openness without borders
President William Ruto also proposes eliminating visa requirements to facilitate trade between African countries and promote interaction between people and investments. He wants to open doors and show other presidents that it’s time to promote openness and move beyond the limited vision of traditional countries.
Kenya’s president may therefore be running the same risk as Gaddafi by talking openly about these ideas and promoting the PAPS. However, he wants to promote openness, ease and interaction between African countries, to free them from the barriers imposed by the former colonial powers.
Totally inspired by Zack Mwekassa’s video
