President William Ruto’s administration is actively pursuing de-dollarisation, aligning with major world economies to reduce reliance on the US dollar.

Speaking at the BRICS summit in Johannesburg where he represented Dr Ruto, Kenya’s Foreign Affairs Cabinet Secretary Alfred Mutua said overreliance on dollars has increased the cost of doing business owing to high foreign exchange interest.

Dr Mutua used the analogy of Africa’s forefathers who would transact through barter trade with merchants from other regions.

“When the great King Shaka Zulu was expanding his empire from Natal to Bulawayo, here in Southern Africa, my ancestors in Kenya were walking long distances to the Indian Ocean coast to bring goods to other traders from the Middle East, Asia and beyond.

The currency of choice then, whether here or at the East African Coast was based on what one needed. You exchanged animal hides and got salt, gold and received silk, ivory in return for spices among others,” said Dr Mutua in apparent reference to how the dollar has curtailed trade in the region.

Dr Mutua addressing BRICS Summit in South Africa.(Photo:MFA)
Dr Mutua addressing BRICS Summit in South Africa.(Photo:MFA)

President Ruto has been at the forefront calling for African countries to ditch the dollar in cross-border trade, saying that the continent already has a mechanism that enables seamless settling of transactions between traders.

Kenya’s shilling has lost 20 percent of its value against the dollar this year, subjecting consumers to costly imports.

Dr Mutua said that at the moment, the issues are no longer about “if’ but when we will adopt a fairer, predictable and reasonable way of transacting with each other.”

“My ancestors would be shocked, for example, if they woke up today and found out that Kenyans cannot use the Kenyan shilling to buy goods in the neighbouring beautiful country of Her Excellency Samia Suluhu of Tanzania, without using an external currency resulting in high foreign exchange interests and monies lost,” the CS told the summit.

Kenya’s proposal comes at a time when calls for de-dollarisation have gathered momentum with BRICS keen on using currencies within their member states as it cuts back overreliance on the US dollar, with plans rife for the establishment of a common currency, a move analysts have termed as ‘impossible’.

BRICS members include Brazil, Russia, India, China and South Africa. The alliance has invited six more members including Egypt and Ethiopia who will formally join in January.