Agenda 2063: Why Africa’s free trade ambitions may depend on blockchain

Today, May 25th, marks the 63rd Africa Day celebration, commemorating the historic 1963 founding of the Organisation of African Unity (OAU), which later evolved into the African Union (AU). The annual event pays tribute to the continent’s progress toward integration, independence, and unity.

However, ten years after the launch of Agenda 2063 (The Africa We Want), the dream of a borderless, prosperous continent remains a work in progress. While the African Continental Free Trade Area (AfCFTA) has provided the legal framework for a revolution, the continent’s financial plumbing is still leaking.

Intra-African trade reached an estimated $220.3 billion in 2024, growing 12.4% year-on-year. Yet it accounts for less than 20% of the continent’s total commerce. To understand why, one must look at how money actually moves. For a merchant in Lagos attempting to pay a supplier in Nairobi, the transaction often follows a Western detour, requiring settlement through correspondent banks in London or New York.

Ayotunde Alabi, the CEO of Luno, argues that this reliance on foreign currencies is not just a logistical annoyance; it is a structural barrier to growth. “The hidden cost is not only the fragmentation; it’s the opportunity cost from the difficulty in allowing a free flow of trade,” Alabi said in an exclusive interview. “The payment layer is not a back-office issue; it is central to whether African trade can scale.”

For businesses, the current model is a game of high stakes. To mitigate the volatility of the naira or the cedi against the dollar, companies must hold excessive working capital. They are forced to price in FX risk, which eats into margins and delays expansion.

“If you look at some of the goals of the AfCFTA, one of the prominent elements is to ensure seamless business operations across African corridors,” Alabi explains. “When payments are transacted in USD in their current form, it means payments will be slow, expensive, and potentially unreliable. For businesses, this means they have to hold more working capital than they should.”

He highlights the staggering potential of the trade pact, noting that the World Bank estimates full implementation could raise Africa’s income by $450 billion by 2035. For Alabi, unlocking that figure requires moving away from legacy systems that are not built for modern African commerce.

Why crypto could be the lifeline for intra-African trade

The common critique of crypto is that it is a playground for speculators. However, Alabi is quick to correct that perspective. He observes a fundamental decoupling between usage here and Western trends.

“In the developed world, the use case is primarily speculation for capital appreciation,” he notes. “In Africa, it is changing because cryptocurrencies like stablecoins solve real-world problems. Nigeria is a case in point. The high adoption of stablecoins in Nigeria isn’t about a change in the basic needs of Nigerians; it’s because, from an enterprise perspective, businesses need to fund suppliers in China, Malaysia, Indonesia, and India.”

He illustrates the difference with a practical example: a cross-border transfer via a traditional bank that takes a week and incurs “material costs” versus a stablecoin transaction that settles in less than five minutes at a fraction of the price. “The remittance problem hasn’t changed,” he says, “but we’ve found a better way to do it.”

To solve the slippage caused by elongated settlement times, Luno is pushing for more robust local assets. With the launch of ZARU, a Rand-backed stablecoin in South Africa, and plans for a Naira-backed equivalent in Nigeria, the aim is to build a continent-wide digital currency system.

“One practical solution is to have an African stablecoin, similar to how the Euro functions for the EU, that players across all countries can recognise as a continental digital currency to solve that fragmentation,” Alabi suggests.

Also read: Here are 8 startups enabling Nigerians to spend crypto easily

When I ask about the institutional requirements for this “sovereign rail”, Alabi emphasises the necessity of compliance. Luno’s approach is “compliance first”, a stance reflected in their massive, dedicated team of over 150 people focused solely on regulatory alignment.

“We are at a crossroads in Africa where we have to think about how these opportunities can impact our economy,” he warns. “Until we view digital assets and stablecoins through the light of economic prospects, we will continue creating regulations out of anxiety rather than opportunity.”

The regulatory environment is already catching up to the technology. Nigeria’s recent classification of cryptocurrencies as financial securities is, in Alabi’s view, the signal the rest of the continent has been waiting for. He sees a “regulatory domino effect” beginning in Kenya, Ghana, and Rwanda.

Looking to the next decade, Alabi’s vision is clear: a truly connected regional economy where a merchant in Accra can pay a supplier in Kigali with the same ease as sending a text.

“In ten years, an African business owner should be able to sell across the continent as easily as they sell locally,” he concludes. “Africa doesn’t just need trade agreements; it needs the financial infrastructure to make those agreements useful.”

By shifting from speculative trading to fundamental financial plumbing, Luno and its peers are quietly building the most important infrastructure project on the continent, one that may finally allow the region to trade with itself.