How East African traders are losing billions to a broken cross-border payment system

Every time a small trader in Eldoret pays a supplier in Dar es Salaam, the money travels to New York first. That single fact, raised at a high-level cross-border payments forum in Nairobi on Friday, captures the absurdity of doing business across East Africa in 2026.

Despite sharing borders, cultures, and, in many cases, languages, traders across the region are still forced to settle transactions in US dollars, routed through American correspondent banks, incurring fees and delays that directly eat into their margins.

The forum, convened by global payments firm Ebury under the theme ‘Cross-Border Payments: Opportunities & Challenges in Africa’, brought together business leaders, bankers, and trade facilitation experts to confront a problem that costs ordinary traders, from market vendors to mid-sized manufacturers, time, money, and opportunity every single day. Akshay Grover, Managing Director, Africa, Ebury, took charge of the event moderation.

Few voices carried more weight on the subject than Vimal Shah, Co-Founder and Chairman of Bidco Group, one of East Africa's largest consumer goods manufacturers. "Moving products across East Africa is where the nightmare begins," Shah said, describing how a company with competitive products and regional ambitions is perpetually held back by fragmented markets, high tariffs, and a payments architecture that was not built with African traders in mind.

Bidco operates across a market of over 300 million people. Yet despite the existence of East African Community trade agreements designed to ease commerce, Shah painted a picture that many traders in the room knew all too well, one of bureaucratic delays, punishing costs, and a system that benefits intermediaries far more than the people actually moving goods.

"We only do dollars," he said plainly. "The transaction is settled in New York." For mama mboga sourcing goods across the border, for a hardware dealer importing materials from Uganda, or for a logistics operator moving containers from Mombasa to Kigali, the impact is the same: more cost, more friction, less profit.

Makabelo Malumane, Managing Director and Head of Transaction Banking at Standard Chartered Bank, acknowledged the structural problem directly, saying the region is caught in a dollar trap. Nearly every significant cross-border transaction in East Africa, regardless of the countries involved, is denominated and settled in US dollars. That means exchange rate risk, correspondent banking fees, and processing delays that can stretch from hours to days.

"How do we get from the dollar fix in every transaction?" she posed, a question that resonated deeply with the traders and financiers in the room. Her institution's response has been to work through partnerships, extending balance sheet capacity by collaborating with other financial players to reach businesses that traditional banking has long underserved.

She also pointed to Kenya's newly enacted Virtual Asset Service Providers Act, 2025, as a potential mechanism to unlock faster, more efficient payment rails for the continent, a regulatory development that signals the government is finally serious about modernising the financial system.

Kennedy Osano, Senior Key Accounts Director for Africa at Ebury, put the structural problem in even sharper relief. The biggest gaps, he argued, are market and currency fragmentation, because most African and East African currencies are not directly convertible with one another.

“There is a regulatory and compliance misalignment, with each country’s central bank operating under its own mandate, creating a patchwork of conflicting rules that makes every cross-border transaction more complicated and costly than it needs to be,” Osano added.

He stated that it is a diagnosis explaining why, despite all the trade agreements and political goodwill, a trader moving goods from Nairobi to Kampala still faces a system not designed with them in mind.

While the financial architecture grapples with currency problems, physical bottlenecks remain just as crippling for ordinary traders. Duncan Onyango, CEO of Trade Catalyst Africa, brought practical urgency to the conversation. His organisation is working directly with governments to redesign how goods physically move across borders, starting with two of East Africa's busiest crossing points, Busia and Malaba.

"We are advocating for the express movement of commodities across borders," he said. The vision is a system where compliant traders with pre-cleared documentation can move through border points without stopping, using smart gate technology that automates verification and flags only those requiring mandatory inspection.

Mr. Onyango said that studies have been completed, border points have been identified, and that the project is now entering the feasibility stage. For the tens of thousands of traders who lose days and perishable goods, to queues at Busia and Malaba every year, this cannot come fast enough.

The conversation turned sharper when Vimal Shah raised a question that many in Kenya's business community quietly ask but rarely say aloud: why are so few local companies listing on the Nairobi Securities Exchange?

For many businesses, the perception is that the disadvantages of going public outweigh the benefits, regulatory complexity, disclosure requirements, and a capital markets system that has not always delivered for local companies.

But Shah was equally candid about another barrier: the sheer inaccessibility of credit. "The reason you are not lending to many people is because of your rates," he told the financial institutions in the room. High interest rates, slow approval processes, and mountains of paperwork have pushed many Kenyan businesses toward foreign financial hubs, particularly Dubai, where money moves faster and with considerably less friction.

Technology, he argued, offers Kenya a way out. "AI teaches us how to use technology to do things online and, in less time," he said. "Approval processes are difficult and take a long time in Kenya. This explains why other countries in the region depend on Dubai," Shah added.

Perhaps the most immediately actionable idea to emerge from the forum was Shah's call for a unified, government-backed KYC, or ‘Know Your Customer’, system. Today, a business owner opening accounts at multiple banks must submit the same documents to each institution separately: identity cards, PIN certificates, business registration papers, and more. It is duplicative, time-consuming, and a particular burden on small traders and women-owned businesses with limited administrative capacity.

"Why can we not have documents and information shared?" Shah asked. "That is where the government comes in to help." The proposal is simple in concept: a centralised digital identity system that allows a trader to verify once and be recognised across all financial institutions. In a country where mobile penetration is among the highest on the continent, the infrastructure for such a system is closer than it might seem.

Elizabeth Irungu, CEO, ABSA Asset Management Limited, offered a perspective that spoke directly to the psychology of East Africa's trading class. "The risk appetite is there," she said. "But the appetite for loss is not." It is a nuance that policy makers and fund managers often miss.

East African traders are not risk-averse; they take enormous risks every single day, moving goods across challenging terrain, extending informal credit, and navigating volatile currencies. What they lack is a financial system willing to absorb some of that risk alongside them.

She called for greater diversification in the fund management space, more products, more options, and more institutions willing to meet traders where they are, rather than designing products for an idealised customer who does not represent the majority of people driving commerce across the region.

East Africa's cross-border trade story is not ultimately one of failure. It is one of enormous, documented, and largely unrealised potential. The region has trade agreements. It has a young, tech-savvy population. It has a mobile money infrastructure that is the envy of the world.

Kenya now has a regulatory framework for virtual assets. Smart gate projects are advancing toward implementation. What is missing is the speed of execution that matches the urgency felt by the traders, the farmers, the small manufacturers, and the logistics operators who cannot wait for the next policy paper.

As Shah puts it, surveying a region of 300 million people connected by borders that should be bridges, the market is there, the products are there, and the people are ready. The system just needs to catch up.