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The head of Future Forex says the souring of relations with the US demonstrates that South Africa needs to diversify its trade partners, and businesses should make sure they use the most economical and efficient ways of transacting across borders. And the co-founder of cross-payment platform Verto, Ola Oyetayo, points to cryptocurrency as key way to ease the “overdose” of red tape that complicates intra-Africa trade. Harry Scherzer, CEO of Future Forex, said US-South Africa tensions underscored the importance of diversifying trade relationships, particularly because the US was South Africa’s second-largest trading partner after China.“We’re not in America’s good books, and any time there’s uncertainty around a major trading relationship, it’s a reminder that we can’t afford to rely too heavily on a single market,” Scherzer said. “Diversifying our trade relationships strengthens resilience and creates more opportunities for South African businesses.”African businesses are facing increased trade challenges such as US tariff hikes, supply chain disruptions due to the Iran war and an EU-sponsored tax on carbon-intensive imports in the form of the carbon border adjustment mechanism.Though the African Continental Free-Trade Agreement (AfCFTA) seeks to boost trade within the continent, it is often more expensive for a business in an African country to send money to another business elsewhere in Africa than for either of them to send or receive money from London.Scherzer said South African SMEs trading internationally faced two key challenges: managing currency risk and navigating the country’s exchange control regulations. Businesses exposed to foreign currencies without any form of hedging risk were seeing exchange rate movements erode already-tight margins.We have an overdose of institutions. We need multilateral frameworks and policies.— Ola Oyetayo“One of the things you can do through providers like Future Forex is lock in your exchange rate in advance. That protects your business from adverse currency movements and gives you certainty over your costs, rather than leaving your margins exposed to market volatility.”He said hidden foreign exchange margins imposed by banks and other financial institutions could significantly reduce the amount of dollars, pounds or euros landing on the other side of the transaction.Scherzer said some of these providers widen their foreign exchange margins, particularly when the rand strengthens, without necessarily telling their clients. Beyond pricing, he said compliance remains critical for businesses making international payments.“South Africa has strict exchange control regulations, so moving funds offshore isn’t as straightforward as it is in many other countries. Businesses need to ensure the correct South African Reserve Bank requirements are met and that the appropriate balance of payments code is applied. If these requirements aren’t handled correctly, payments can be delayed and, in some cases, businesses may face regulatory complications.”Oyetayo, CEO of Verto, told Business Times that it was easier for a business in South Africa to pay a business in London than pay a business elsewhere on the continent. “There’s no lack of will and policies that aim to reduce the current friction in payments within Africa and outside of Africa. The challenge we are facing is implementation. One of the reasons is the regulatory silos that we have.”Read: Banks’ ‘boys club’ gets entrenched in latest round of executive appointmentsHe said that while agreements such as the pan-African payments & settlement system were positive, the proliferation of regulators with different systems was a hindrance to cross-border transactions. “What doesn’t need to happen is more institutions or more regulatory frameworks. We have an overdose of institutions. We need multilateral frameworks and policies.”He said fintech companies and the private sector were taking the lead with the adoption of stablecoins as a response to cross-border payment challenges. While regulators catch up, private sector innovators are already doing what the public is asking for, he said.The recently released African Export-Import Bank “Africa Trade Report” said aggregate inflation moderated significantly from 21.6% in 2024 to 13.1% in 2025, with some countries recording a rate as low as 3%. Merchandise trade expanded 6.1% in the period to about $1.5-trillion (R25-trillion), and intra-African trade grew 5.5% to about $213.8bn.“These outcomes reflect improving macroeconomic management, strengthening institutions, expanding regional co-operation, and the determination of African countries to sustain growth despite a complex global environment,” the bank said.The report said Africa must act urgently to harness global fragmentation as an engine of resilient, inclusive growth and value-added, sustainable trade.Business Times
