Grover: Converting African Currencies into Dollars in Cross-border Business, Disincentive to Trade
The Chief Executive Officer of Cellulant, a Fintech company driving financial inclusion in Africa, Mr. Akshay Grover, has stressed the need for the growth of cross-border business among African countries, without trading in dollar denominated currency for payments.
According to him, cross-border business that encourages local currency, without dollar denominated currency, will be the game changer for Africa, adding that the idea to first convert African currencies into dollars to make payments for cross-border business is inefficient and a disincentive to trade.
Grover, who spoke at a recent media interactive session at the company’s Lagos office, said cross-border payments in Africa would grow bigger, better, and faster without the US Dollar in the middle.
He explained that Cellulant remained a leading pan-African payments technology company founded on a deep belief in the power of building payments ecosystem that create seamless interoperability across the continent.
He said: “When I want to change Ghanaian Cedi to Naira, I first need to change Cedi to US dollar then US dollar to Naira. That’s the most inefficient way of converting our currencies. What we could do is enable trade without converting to the US dollar. This is a huge opportunity for cross-border trade.”
Grover added that getting rid of dollars for trade would also help tackle the ‘dollar liquidity’ problem. Why is there so much demand for dollars? Why do I need to convert to the dollar to do business?, Grover asked.
He noted that though unfortunate, the ongoing Russia-Ukraine war has led to the benefit of using local currencies for items previously traded in dollars.
“People are now buying oil in local currencies, which never happened, but it is now happening because of the Russia-Ukraine war,” Grover explained.
He said it was time financial regulators in Africa, particularly central banks, moved to resolve the problem of dollar dependence to boost cross-border payment on the continent.
“For this, you need a little cooperation. Everyone needs to come to the table. And this has to happen at the Central Bank or the government level, not Cellulant’s. Maybe it might not happen soon for all of Africa, but we can start building bridges. To some extent, Francophone African countries have tried to do that by trying to create one currency- the CFA – and it helped them quite a bit. So, I think the move has started, but how quickly we get onto that road will determine how big this could be in the next two to three years, “Grover said.
He explained that Cellulant was already playing in the cross-border payment space by hosting a lot of intra-Africa traffic through its self-built infrastructure.
Speaking further on the business, which helps SMEs and large local enterprises to resolve their payment and collection issues by directly providing solutions that enable them to collect payments or payout to their customers, Grover disclosed that Nigeria might overtake Kenya as the biggest revenue contributor for Cellulant in the next six months.
Speaking on Cellulant’s plan for the future of trade and commerce in Nigeria, Grover said Cellulant would continue to expand its business in Nigeria, adding that the company is currently processing the raising of $100m Series D Funding that will help it further expand its business in Nigeria and in other Africa countries.
“The Series D financing will help Cellulant expand its business, improve on its technology and drive marketing across Africa. The Series D Funding will be concluded by December this year,” Grover said.
Founded in 2003, Cellulant has more than 18 years of experience providing locally relevant payment solutions for businesses and their consumers. Its evolution over the years, from a digital content business to mobile banking and now to payments, has allowed the company to build an expansive network, strong relationships, and partnerships, “he said.