Image: Global Finance Magazine
Mauritius wants to become Africa's main center for cross-border payments. The island nation hopes to fix a big problem in Africa: sending money from one country to another is slow, costly and complicated.
Today, many African businesses must send money through banks in Europe and the United States, even when both sides of the deal are in Africa. This adds high fees. In Africa, these fees can reach 7.1%, compared with a world average of about 2.8%.
Africa's payment world is also split into many pieces. Around 36 instant payment systems are live, including 33 national systems and three regional ones. They help some payments move fast, but they do not always work well together.
Cross-border payments in Africa were worth about $329 billion last year. Experts believe the market could reach $1 trillion in the next ten years. But the split systems still slow down trade, investment, new businesses and the spread of banking to more people.
Mauritius has several strengths that help it play this role:
Payment companies say global merchants want one single link into Africa. They do not want to build separate payment links in every country. Mauritius can offer this kind of base for treasury, billing and payment work.
A partner at the Mauritius-based law firm Appleby says the country is still attractive as payment systems change. The idea is that Africa can grow stronger only when money moves across borders in a way that is fast, safe, clear and cheap.
Experts also point out that trust is key. For Mauritius to become a true hub, businesses must feel sure that their money is safe and that the rules are fair.
If Mauritius succeeds, African companies could pay less in fees and wait less time for their money. This could help trade between African countries grow faster. But the island will need to work with other regions and payment systems to join Africa's split networks into one.
