The invisible cost of fragmentation

Episode 1 — Four countries, four currencies, one result

Four African countries captured 72% of the $4.1 billion raised by the continent's startups in 2025. In the first quarter of the same year, the proportion rose to 83%.

These four countries are Kenya, South Africa, Egypt and Nigeria.

The explanation that comes immediately, in the conversations I have in Brazzaville as in Algiers, fits in one word: currency. The ecosystems that win would be those that control their currency; those that stagnate would be those that do not.

I want to begin this series by dismantling this explanation. Not because I am indifferent to it — I will devote seven texts to it — but because it is false in its simple form, and a series that begins with an error would not deserve to be read to the end.

The fact that should close the debate, and opens it

Look at these four countries.

Nigeria has a floating naira, massively devalued since 2023. Kenya has a floating shilling, under strong pressure in recent years. South Africa has a freely traded rand and one of the deepest capital markets among emerging economies. Egypt has a pound devalued multiple times, under an IMF programme.

Four countries. Four different exchange-rate regimes. Four monetary histories with nothing in common.

And an identical result: they capture the bulk of African startup capital.

If such dissimilar monetary regimes produce the same result, the monetary regime cannot be the variable that explains that result. That is elementary logical constraint, and I know of no way around it.

Symmetrically, 2025 saw Senegal raise $157 million, Benin $100 million, and Gabon record its first venture-capital-backed deal. Three CFA franc countries, with unchanged currency, whose numbers are improving. And one of the year's highlights was the $137 million syndicated debt raised by a Senegalese mobile payments company — the largest francophone deal ever.

The CFA franc had not moved.

What I am not saying

I am not saying the monetary regime is irrelevant. I am saying the 'CFA therefore lag' argument does not survive thirty seconds of examination, and that we must look elsewhere — or more finely.

I am also not saying the gap does not exist. It exists and it is massive. A founder from Douala or Brazzaville does not face the same capital market as a founder from Lagos or Nairobi. This series does not contest the fact; it contests its most widespread explanation.

And I am not saying the debate about the CFA franc is illegitimate. It is old, serious, and it engages questions of sovereignty that go far beyond business financing. I am simply saying that for a founder, it is not the debate that decides their fate. Seven episodes to establish that.

The explanations that hold better, and must be put on the table at once

Before moving to what interests me, we must give their weight to the obvious factors. An analysis that glosses over them disqualifies itself.

Domestic market size. Nigeria has over 230 million inhabitants. Congo-Brazzaville has about six. An investor writing a $10 million cheque needs a market where that cheque can turn into hundreds of millions in revenue. No monetary regime compensates a fortyfold factor in population.

The language of business. Global venture capital operates in English. Its standard documents fall under American or British law. Its alumni networks, its flagship accelerators, its conferences, its newsletters are anglophone. A Nigerian founder enters this system without translation; a Cameroonian founder must first get in. This factor is probably the most underestimated of all, and it has nothing to do with currency.

Head start and agglomeration effects. Ecosystems are built through accumulation: a first exit creates angel investors, who fund the next generation, which produces the experienced executives of the third. Kenya began this accumulation fifteen years ago with mobile money. South Africa had a financial industry before the word startup even existed locally. You cannot catch up fifteen years of accumulation through a single regulatory decision.

Financial system depth. South Africa raised $715 million in 2025, 90% in equity — a sign of broad investor participation rather than a handful of exceptional deals. Conversely, Kenya, first in the ranking at roughly $1.04 billion, owes 60% of that amount to four transactions, largely in debt and solar energy. The same headline figure covers two entirely different realities.

There are four solid explanations, all non-monetary. They occupy, in my estimate, the bulk of the terrain.

So why seven episodes?

Because once these four factors are deducted, something remains. And that something is precisely what nobody ever talks about, because it is technical, boring, and does not make good headlines.

Here is the question I propose to follow for a week, replacing the usual one.

It is not: is the CFA franc good or bad? It is: which precise elements of the African monetary and financial architecture determine the speed at which a company can finance itself and cross a border?

The difference between these two questions is not cosmetic. The first calls for a camp. The second calls for a list — and a list can be dealt with point by point.

I give you the itinerary, because I believe a series must announce its plan.

Episode 2. A stable currency keeps its promises. Which ones exactly, and at what price? Episode 3. Where is the money that should fund our companies? And why the channel that counts is not the one people think. Episode 4. The central paradox: eighty years of common currency in Central Africa, and the lowest intra-community trade on the continent. Episode 5. What an African border actually costs, in days and commission points. Episode 6. PAPSS: what it does, and what it does not. The BEAC joined it last 9 July. Episode 7. Being born pan-African.

The counter-argument to this episode

One can object, and the objection is good: by setting aside the exchange-rate regime in the first text, you empty your series of its subject. If only market size and language remain, there is nothing left to say and nothing to change.

My answer has two parts.

First, market size and language are not variables of action. One does not decide to have a hundred million more inhabitants, and one does not change a continent's business language. An analysis that stops there is an analysis that concludes with helplessness.

Second — and this is the bet of this series — market size is partly a variable of action, provided one stops reading it country by country. A Congolese founder does not have six million potential customers: they have 1.4 billion, separated from them by a stack of obstacles some of which are recent, technical, and dismountable. It is that stack I want to describe.

In other words: I am not removing currency from my subject. I am putting it back in the right place, which is not the exchange rate.

What this changes, right now, for a founder

Three immediate consequences, before even the rest of the series.

If you are raising funds and someone tells you your difficulty comes from your currency, the honest answer is that your difficulty comes first from the size of your addressable market as you present it. Widen it, and you change the conversation before changing anything else.

If you build for a single CFA franc country, you build for a market that few institutional investors consider fundable — not out of prejudice, but out of exit arithmetic.

And if your product crosses borders, you must know, with figures in hand, what each crossing costs. Most founders I meet do not know. That is the subject of episodes 4 and 5.

Open question: in your country, when a founder explains their difficulty raising funds, what reason do they cite first — and does that reason survive scrutiny?

Episode 2 — A stable currency keeps its promises. Which ones?

In the previous episode, I set aside the exchange-rate explanation. Now we must do the reverse and look at what monetary stability actually produces — without complacency in either direction.

I start with a fact that embarrasses CFA franc critics, and I give it upfront because it is true.

Between 2000 and 2012, of the nineteen sub-Saharan African countries with the lowest inflation, fourteen belonged to the franc zone. The figure appears in the advocacy document that served as the starting point for this series — and it is, in my view, the best information it contains, precisely because it accuses nobody.

It says this: the CFA franc delivers exactly what it promises. It promises low inflation and a stable parity; it provides low inflation and a stable parity. As recently as 2025, the Central Bank of West African States was reporting zero inflation in UEMOA, with 6.7% growth.

A monetary system that keeps its commitments is not a detail. The whole question of this episode is what those commitments buy, and what they do not.

What stability buys, and it must not be minimised

Low inflation protects three concrete things.

A salary. A teacher in Bobo-Dioulasso retains their purchasing power year on year. This seems abstract until you observe what happens elsewhere: in several African economies with flexible exchange rates, inflation recently exceeded 30%, meaning a salary loses a third of its value in twelve months.

Savings. Where the currency melts, nobody saves in local currency. They buy foreign exchange, property, goods. Savings take refuge in unproductive assets, depriving precisely the economy of the capital this series will show is lacking.

A long-term contract. A ten-year loan, a commercial lease, a multi-year supply contract all assume you can write a figure in a currency that will still be worth something at maturity.

For a founder, this translates very directly. In a stable economy, you can set a price for a year. You can sign a three-year customer contract. You can build a budget that does not become obsolete next quarter. Those who have never built in a high-inflation economy underestimate what that represents.

What it does not buy

And yet.

Over the period 2000-2019, of the twenty-seven sub-Saharan African countries with the highest real GDP per capita growth, only three belonged to the franc zone — Chad, Burkina Faso and Equatorial Guinea. Two of them are hydrocarbon producers, meaning even the zone's performance over that period was largely an oil performance.

Stability did not therefore produce transformation.

We must name precisely what is missing, otherwise we fall back into slogans. What is missing is not growth: growth exists, and 6.7% is a figure few regions of the world reach. What is missing is structural transformation — the passage from an economy that exports raw materials and imports manufactured goods to one that manufactures itself.

That is a more modest claim than 'the CFA prevents growth'. It has the advantage of being exact.

The historical argument, and its limit

The advocacy document advances here a reasoning that must be examined seriously.

South Korea, between 1960 and 1990, experienced about 7.6% growth per capita with average inflation near 12%, sometimes reaching 30%. Its income per head doubled every nine years. Ethiopia, between 2000 and 2019, experienced about 6% per capita growth with 17% inflation. Benin, over 2010-2022, posted the franc zone's lowest inflation at 1.4%, without a comparable emergence trajectory.

Samir Amin formulated it as early as 1969: a unique performance is demanded of Africa in world history, rapid development without inflation.

What this argument establishes: low inflation is not a necessary condition for rapid development. That is solid, and it is important, because the dominant discourse often presents price stability as an absolute prerequisite.

What it does not establish: that inflation would have helped. Korea also had a radical agrarian reform, strict capital controls, state-directed bank lending to exports, performance discipline imposed on its conglomerates, and privileged access to the American market in a particular geopolitical context. Isolating inflation from that bundle is retaining one variable out of twenty.

And I must note something the document could not anticipate: Ethiopia, its virtuous counter-example, has since experienced a major exchange-rate crisis, a debt restructuring and significantly higher inflation. The counter-example turned on itself during the writing. That is a reason for caution, not a refutation — but it is one.

The serious counter-argument: flexibility has a price, and it is visible

We must go further, because the opposing camp has an argument that recent events have made very strong.

In 2025, Nigeria fell back to fourth place in African startup funding, in a context of monetary crisis and exit scarcity. This is not a coincidence, and the mechanism deserves to be exposed.

When a currency loses half its value in eighteen months, a local startup suffers four simultaneous effects. Its dollar valuation collapses, even as its local-currency activity grows — making any foreign-currency raise dilutive beyond reason. Its imported inputs, servers, equipment, software licences, double in price. Its foreign investors see their expected return destroyed before the company has even failed. And repatriation becomes a problem in itself.

Add the most uncomfortable fact for the anti-CFA thesis: since 2020, sovereign defaults and debt restructurings in sub-Saharan Africa have affected Zambia, Ghana, Malawi, Ethiopia. No franc zone country.

The advocacy document concludes that fixed parity condemns to permanent external indebtedness. The mechanism it describes is real: defending a parity requires reserves, reserves must be financed, and the franc zone largely finances them through debt. But if we judge by results rather than mechanism, it is the flexible-exchange economies that stumbled.

Honest conclusion: both regimes have a price. Stability costs in room for manoeuvre and competitive devaluation capacity. Flexibility costs in predictability and local asset value. There is no free regime, and anyone presenting you with one is selling you something.

What this changes for a founder

Here is the shift I propose, and it governs the rest of the series.

Ask a Lagos founder about their main constraint: they will talk about currency, because they feel it daily in their costs. Ask an Abidjan or Brazzaville founder: they will rarely talk about parity, because it does not move. They will talk about access to finance.

It is not the same constraint, and it is not in the same place in the monetary system.

What hits a franc zone founder is not the exchange rate. It is what accompanies it: exchange controls, repatriation obligations, prior authorisation for certain transfers, delays on dividend and divestment proceeds. These rules are not the parity. They are the apparatus that defends it.

And an international investor almost never walks away because a currency is stable. They walk away because they cannot see how they will exit.

That is where the real subject lies, and it is the object of episode 3.

Open question: between a perfectly stable currency and wider access to capital, if you had to choose for your company, which would you choose — and would the choice be the same for your country?

Episode 3 — Where is the money that should fund our companies?

There is a sentence heard everywhere that is false: 'Africans do not invest in African startups'.

It is false because it assumes a choice. It implies that somewhere there are African capital holders who would prefer something else. The reality is more prosaic and more fixable: in most of our economies, there is no institution whose job is to turn local savings into equity in an unlisted company.

It is not a willingness problem. It is a plumbing problem. And plumbing gets built.

The three channels, and why they are blocked in the same place

The capital that funds a company always comes from one of three channels. Let us look at them one by one.

First channel: domestic savings

They exist. They are even considerable if you add bank deposits, pension funds, insurance companies, social security funds and the informal savings of tontines.

Where do they go?

Overwhelmingly to public debt. A regional sovereign bond offers a commercial bank a decent return, favourable regulatory weighting, acceptable liquidity and no analytical work. Facing that, an equity stake in a three-year-old, unlisted, unguaranteed company requires an analytical team the bank does not have and unfavourable prudential treatment it does not want.

The rest goes to real estate — the refuge asset par excellence in economies where people distrust financial instruments.

The result is an economy where savings exist and private equity does not. That is not a contradiction: they are two different professions, and the second has not been created.

Second channel: bank lending

It is structurally unsuitable, and not only in Africa.

A bank lends against collateral and against a track record. A startup has neither: its assets are intangible, its track record is short, and its plan rests on growth that no prudential ratio knows how to evaluate. Add, in our economies, high real interest rates and collateral requirements frequently reaching the full loan amount, and you get a channel closed to the bulk of young companies.

One useful observation, however: 2025 saw debt become a major instrument for financing African growth companies, notably in energy and payments. The year's largest francophone deal — $137 million for a Senegalese mobile payments company — was syndicated debt, led by a South African investment bank. Debt is therefore becoming a channel again, but for established companies backed by predictable cash flows. It does not finance seed-stage.

Third channel: foreign capital

That is what remains, and it is where the monetary regime actually acts.

Not through parity. Through the exit.

The mechanism nobody talks about

Here, in my view, is the central point of this entire series, and it is absent from the public debate on the CFA franc.

A venture capital investor does not buy an income. They buy an exit: the future resale of their stake, five to ten years later, to an industrial buyer, another fund, or on the stock market. Their entire business is organised around this event. A fund itself has investors to whom it has promised to return the money by a given date.

Before writing a cheque, they therefore ask three questions in this order.

Is there a credible buyer in five years? A question of market size and industrial density. It already disadvantages small economies.

Can I bring my money in properly? A question of corporate form, preference shares, standardisation of legal documentation.

Can I get it out? A question of convertibility, exchange controls, delays and authorisations for repatriating dividends or sale proceeds.

It is this third question that decides, and it is the one nobody talks about, because it is technical and does not make good public debate.

An exchange-control regime is not an exchange-rate regime. They are two distinct things that are systematically confused. You can have a perfectly stable currency and a very closed capital account. You can have a volatile currency and entirely free capital outflows. What interests an investor is the second variable, not the first.

I say this with appropriate caution: I do not have a rigorous comparative measure of the cost of these procedures from one country to another, and I have found none that is public and up to date. That is precisely the kind of data whose absence explains why the debate stays at the level of parity. If a reader has figures on actual repatriation delays in UEMOA and CEMAC zones, I am interested, and I will publish them.

The serious counter-argument

An attentive reader will object, and the objection is strong: if exchange controls were really blocking, no franc zone company would raise foreign capital. Yet they do, and increasingly.

That is exact. In 2025, Senegal raised $157 million, Benin $100 million, and the first half of 2026 saw Côte d'Ivoire surpass $25 million, alongside Tanzania — a sign that the African investment map is diversifying beyond the four dominant countries. A Senegalese company became West Africa's first francophone unicorn, with unchanged currency and under the same exchange regime.

The correct conclusion is therefore not that the constraint is a wall. It is that it is friction: it does not make the deal impossible, it makes it slower, costlier in legal fees, and it eliminates the least determined investors. In other words, it reduces the number of tickets, not their possibility.

Yet for an ecosystem, the number of tickets is exactly what counts. A capital market is not judged on the existence of three remarkable deals, but on the density of ordinary ones.

What this changes for a founder

Five practical consequences, drawn from the foregoing.

Legal structure is decided before the raise, not during. Many African growth companies are held by a holding company established in a jurisdiction offering standardised documentation and predictable exit, while the operating company remains local. This is not tax evasion: it is a response to friction. The question that should concern African authorities is why this structure cannot be local.

Debt has become a serious instrument again, but for predictable cash flows. If your model produces verifiable recurring revenue, do not seek equity first.

Your first institutional investor may be a large local group. The banks, telecom operators and distribution groups in the region have the balance sheet, the market knowledge and a direct strategic interest. They are not structured to invest in venture capital — but nothing forbids them.

Document your cross-border flows from the first euro. That is the part founders underestimate most, and the one that blocks due-diligence for equity entry.

Do not build for a single CFA franc country. The exit arithmetic does not work. That is the subject of the next three episodes.

Open question: in your country, does an institution — pension fund, insurance company, social security fund — have a mandate that explicitly authorises investing in the equity of unlisted companies? And if so, has it done so?

Episode 4 — A common currency does not make a common market

Six Central African countries have shared the same currency since 1945. The same central bank. The same exchange rate. A customs union. Harmonised business law. A market of over fifty million inhabitants.

They trade with each other less than any other regional grouping on the continent.

That is the central fact of this series, and I want to treat it carefully, because it is brandished by both sides of the monetary debate and it should, in my view, worry them both.

First, the figure — and why it must be handled with care

It is commonly read that CEMAC intra-community trade represents 1.5% of total trade. The document that served as the starting point for this series reproduces this figure, attributing it to an Afreximbank report of December 2023, and presents it as an annual average between 1945 and 2021.

I will not reproduce it as is, for two reasons.

The period is anachronistic. The Central African Customs and Economic Union dates from 1964, CEMAC from 1994. Measuring 'intra-community' trade from 1945 amounts to measuring a community before its existence. The common currency has indeed existed since 1945; the economic community has not.

Sources diverge by a factor of five. Under 2% appears in some older analyses, 3.5% in a UN Economic Commission for Africa report presented in Malabo, under 5% according to the World Bank and the same Commission, and 8.0% of total exports with 6.4% of imports in a BEAC working paper itself.

This spread is not a statistical scandal: it is explained. You are not measuring the same thing depending on whether you ratio intra-zone trade to exports, imports or total trade. And above all, official statistics do not capture informal cross-border trade, which is considerable in Central Africa — pirogues on the Ubangi, trucks on the Douala-N'Djamena corridor, border markets.

The formulation I retain is therefore this: depending on the perimeter adopted, CEMAC intra-community trade represents between 1.5% and 8% of the zone's trade. In all cases, it is the lowest level of all African regional economic communities. The same BEAC document places the European comparison at around 64%.

Less punchy. Considerably more solid. And I prefer to lose in impact what I gain in credibility, because the rest of the series rests on this fact.

Why this fact is fatal to both camps

Here is what I find remarkable, and rarely stated.

It ruins the argument of CFA franc defenders. One of the classic theoretical benefits of a monetary union is the elimination of exchange-rate risk and conversion costs, therefore the intensification of intra-zone trade. That is the standard economic justification, found throughout the literature on optimal currency areas. Eighty years later, in Central Africa, this effect is undetectable. The common currency did not produce common trade.

It also ruins the argument of its critics. If the CFA franc were the main lock on regional integration, then the six countries sharing it — and which therefore have between them no exchange-rate risk, no conversion cost, no convertibility problem — should trade intensively. They are in the most favourable monetary configuration one could imagine. And that is where trade is the weakest on the continent.

The conclusion imposes itself and is uncomfortable for everyone: currency is neither the problem nor the solution. It is one element of an architecture whose other elements are failing.

That is the pivot of this series. Everything before it led there; everything after it follows from it.

So what is blocking?

Three families of obstacles, none of which is monetary.

The structure of the economies themselves. Over 80% of CEMAC zone exports are concentrated in hydrocarbons and primary products, according to the IMF. Six countries that all export oil, timber and minerals have little to sell each other. Trade is born of difference; these economies are similar. That is the most serious objection that can be raised to my entire reasoning, and I return to it below.

The physical cost of movement. Logistics costs can reach 30% of goods value in the sub-region, according to the World Bank. A figure that has circulated for a long time, and remains illuminating: transporting goods between Douala and N'Djamena long cost several times more than bringing them from Shanghai to the port of Douala. When it is cheaper to import from Asia than to buy from your neighbour, regional trade does not happen.

Administrative barriers. Free movement of goods and services was decided by CEMAC institutions. In practice, the CEMAC Commission itself acknowledges that barriers persist — residual tariff barriers, customs procedures, multiple controls, sanitary and phytosanitary measures applied inconsistently. A political decision does not become an administrative reality through the sole effect of its publication.

What this means for a founder, concretely

Let us step out of macroeconomics, because that is where the reasoning becomes useful.

A Brazzaville company wanting to sell to a Douala company shares the same currency. On paper, the transaction should be as simple as between two cities of the same country.

In practice, it faces a succession of obstacles none of which is monetary: a customs declaration, clearance, road or port checks, invoicing within a different tax framework, a VAT regime that varies, logistics whose cost can absorb the margin, and a banking relationship that is not automatic between two banks of different countries even within the same monetary zone.

The result is what all founders in the region describe: crossing an African border costs more than exporting to Europe. That is not a rhetorical paradox, it is a cash-flow reality.

And for a digital company, the difficulty takes another form, often more discouraging: you need a new licence, a new payment provider, a new banking relationship, new compliance. In other words, you must rebuild your entire financial infrastructure. That is the subject of episode 5.

The serious counter-argument

The most solid objection that can be raised is that of complementarity, and it deserves better than a dismissive answer.

CEMAC economies all export the same products. Their weak mutual trade is therefore not an institutional failure but a normal consequence of their productive structure. No payment infrastructure will make Gabonese oil bought by Congo.

That is true, and we must grant it. But the objection displaces the question without closing it.

First, it applies to raw materials and much less to services, where complementarity does not need to exist — management software, payroll services, logistics platforms, payment solutions export from one country to another regardless of any productive structure.

Second, weak intra-zone trade is partly endogenous: companies do not diversify toward regional products because those outlets are costly to reach, and outlets remain costly because nobody ventures there. This loop can be broken by cost, or left to break on its own.

Finally, the comparison with Europe is instructive. European economies were not strongly complementary in 1957 either. They became so, because falling transaction costs made specialisations profitable that had not been. Complementarity is not only a starting condition. It is also an outcome.

Open question: have you ever sold to a client in a neighbouring African country? If so, how many days and how many commission points did it cost you compared to a domestic sale?

Episode 5 — Fragmentation is the real cost, and it is quantifiable

We have established four things. The exchange-rate regime does not explain the gap between ecosystems. Monetary stability keeps its promises but does not buy transformation. Capital lacks local institutions to form, and foreign capital hits the exit rather than the parity. And a common currency, in Central Africa, produced neither a common market nor common trade.

We must now name what remains. I propose a word: fragmentation. And I propose to treat it as a quantity, not as a lamentation.

Fragmentation is not an abstraction, it is a stack

When a founder wants to sell in a neighbouring African country, they do not encounter one obstacle. They encounter seven, and they do not cancel each other out: they add up.

Licensing. A regulated activity — payments, credit, insurance, health, transport of personal data — requires a national authorisation. It is not recognised from one country to the next, even within a monetary union. A payment institution licensed in a UEMOA country does not automatically operate in the neighbouring country of the same union.

Banking relationship. You need a local account, therefore an opening file, therefore a local entity, therefore articles of incorporation, a business register, a tax number, a resident representative. Count several weeks in the best case.

Payments. The dominant payment methods differ from one country to another — mobile money operator here, another operator there, cards elsewhere. Each technical integration is a project.

Compliance. Each jurisdiction has its own know-your-customer and anti-money-laundering obligations, its thresholds, its reporting formats.

Taxation. Different VAT regimes, withholding taxes on cross-border services, absent or unimplemented tax treaties, transfer pricing to document.

Exchange and repatriation. Even with identical currency between two zones bearing the same name, the UEMOA CFA franc and the CEMAC CFA franc are not freely interchangeable between the two zones. A transfer from Abidjan to Douala is not a domestic transfer.

Correspondent banking. And that is the most costly. For lack of direct relationships between African banks, a portion of African cross-border payments has historically transited through correspondent banks located outside the continent, with double conversion into a third currency, delays of several days, and fees at every step.

Seven obstacles. None is a scandal taken individually. Their addition constitutes an entry barrier that no seed-stage startup crosses without raising funds — that is, without first solving the problem of episode 3.

The point that should hold attention

Let us revisit this list and ask a simple question: how many of these seven obstacles belong to the monetary regime?

One and a half. Exchange controls and, partially, correspondent banking.

The other five — licensing, banking, payments, compliance, taxation — are national regulatory choices, independent of any currency. A country that left the CFA franc tomorrow morning would keep them all.

That is the demonstration this series has been pursuing for five episodes. The monetary debate, whatever its political importance, addresses only a fraction of the problem it claims to explain. And it occupies the available intellectual space, which prevents working on the other five.

The counter-argument, and it carries weight

Europe took fifty years to build its single market, with powerful institutions, a common budget, a binding court of justice and already industrialised economies. Demanding the same of Africa in a decade is unrealistic.

The objection is factually correct and I accept it entirely. Three remarks, however.

First, Europe built in the reverse order of what one imagines: the common market first in 1957, the monetary union forty years later. Central Africa did the opposite — common currency in 1945, economic community in 1994, market still incomplete. This does not establish that one order is superior to the other, but it suggests that currency does not pull the rest behind it.

Second, the objection is an argument for patience, not immobility. Fifty years is long, but it is finished. The question is not whether one can go fast, it is whether one has started.

Third — and this is the point that makes this series current — part of this work is under way, right now, and nobody is talking about it. The infrastructure that addresses the most costly obstacle on my list entered Central Africa four weeks ago.

The second counter-argument, more subtle

You describe administrative frictions. But administrative frictions exist everywhere, including between US states or between European countries. They stop nobody from building.

That is true, and it is a serious objection to a victimhood reading of the problem. The answer lies in a matter of proportion.

A fixed administrative friction — three months of licensing, fifteen thousand euros in legal fees, two months to open an account — behaves like a fixed cost. Against a market of two hundred million consumers, it is negligible. Against a market of six million, it can exceed the present value of the market itself.

In other words: fragmentation does not penalise everyone equally. It penalises exactly the small markets, that is, those that would most need to aggregate. It is a cumulative mechanism, and that is what makes it serious.

That is also what explains an otherwise paradoxical fact: a Nigerian startup can content itself with Nigeria for ten years, while a Congolese startup must be regional from its second year. The one that most needs to cross borders has the fewest means to do so.

What this changes for a founder, this week

Three operational things.

Measure. Before deciding on an expansion, write out the seven lines on my list and cost them for the target country: licensing delay, account-opening delay, legal cost, payment integration cost, transfer fee, actual receipt-of-funds delay. Most founders I meet have never done this exercise, and discover in doing it that the country they were aiming for was not the right one.

Sequence by crossing cost, not by market size. The second most attractive country is rarely the largest. It is the one whose border is cheapest to cross from where you are.

Treat cross-border payments as a strategic line item, not an execution detail. It is the item on which an infrastructure improvement will produce the fastest effect on your cash flow — and that improvement is arriving.

Where we stand

The series set aside currency as the main explanation, then identified capital as the constraint, then showed that the capital constraint itself rests on an exit question, then established that a common currency does not produce a common market, and finally decomposed fragmentation into seven obstacles of which only one and a half are monetary.

It remains to examine what addresses the most costly of them. The Pan-African Payment and Settlement System today connects twenty-eight countries. The Bank of Central African States joined it on 9 July 2026. The Central Bank of West African States is preparing a six-month pilot phase with over eighty commercial banks.

That is not a promise. It is under way, and it is tomorrow's subject — with the severity required, because this system does not do everything it is credited with.

Open question: among the seven obstacles on this list, which one has actually cost you the most — in money, or in lost months?

Episode 6 — PAPSS: what it does, and what it does not

Conflict-of-interest disclosure, before all else: I run Lobaka, a voice infrastructure company whose market is pan-African. An improvement in African cross-border payments serves me. The reader should know this before reading what follows, and I will endeavour to be harsher with this subject than I would be with another.

On 9 July 2026, the Bank of Central African States joined the Pan-African Payment and Settlement System. Twelve days later, in Dakar, the Central Bank of West African States announced preparations for a six-month pilot phase involving over eighty UEMOA commercial banks.

The two events are separate in origin but convergent in effect: the last major monetary barrier to intra-African capital flows — the absence of a continental payment backbone — is being dismantled. What remains to be understood is what PAPSS does, what it does not do, and what it will not do without further reform.

What PAPSS is

It is a payment and settlement system designed to allow an African company to pay a supplier in another African country without routing the transaction through a European or American correspondent bank.

Today, when a Cameroonian company pays a Ghanaian supplier, the money typically travels through a correspondent bank in Europe or the United States. The Cameroonian bank debits in CFA francs, converts into dollars or euros, the correspondent processes the transfer, the receiving bank converts into cedis, and the Ghanaian supplier receives cedis. The process takes several days, involves double conversion fees, and transits through a jurisdiction that has no business in a purely African transaction.

PAPSS replaces this chain with a direct one: the Cameroonian bank debits in CFA francs, the system converts into cedis at a rate it negotiates, and the Ghanaian supplier receives cedis. One conversion instead of two. A few hours instead of several days. The transaction stays on the continent.

The principle is the same as what Visa and Mastercard do for card payments — a common rail that settles in local currencies — extended to bank-to-bank transfers and, eventually, to government payments, trade finance and remittances.

What PAPSS changes for a founder

Three things, depending on the stage.

For a company that already operates across borders: lower costs and faster settlement. The most immediate effect is on cash flow. A company that used to wait five business days for payment confirmation from a neighbouring country can now expect settlement within hours. That is not a detail when you are running on tight working capital.

For a company considering its first cross-border move: a lower barrier. The reduction is not only financial. It is also operational: the company no longer needs to establish correspondent banking relationships, negotiate exchange rates with each partner bank, and build compliance procedures for each corridor. The system standardises what was previously a bespoke process.

For a company building a pan-African product: a more uniform infrastructure. A payment, lending or insurance product that works in Senegal can more easily work in Côte d'Ivoire, then in Ghana, then in Kenya. The infrastructure layer becomes replicable.

What PAPSS does not change

It does not remove the other six obstacles. A company that wants to operate in a neighbouring country still needs a local licence, a local bank account, local compliance, local taxation. PAPSS addresses the plumbing of payments, not the architecture of market access.

It does not solve the problem of exchange controls. The CFA franc zones — both UEMOA and CEMAC — retain capital controls that limit the repatriation of dividends and sale proceeds. PAPSS makes it easier to move money for trade, but it does not remove the regulatory apparatus that governs capital flows.

It does not yet cover all corridors. The system's coverage is expanding but incomplete. Some corridors are operational, others are in pilot, others are planned. A founder choosing which country to enter next should verify that the PAPSS corridor they need is actually live.

It does not guarantee the best exchange rate. The system negotiates rates, but the quality of those rates depends on the depth of the FX market in each corridor. For widely traded pairs — CFA/euro, naira/dollar — the rate will be competitive. For thinner pairs — CFA/criollo, naira/kwacha — the rate may be less favourable than what a large bank could negotiate bilaterally.

What still needs to happen

Three things, without which PAPSS will remain a useful but incomplete tool.

First: integration of the informal economy. Most intra-African cross-border trade is informal — pirogues, trucks, bus couriers. PAPSS is designed for formal banking channels. Until it can process the micro-transactions that constitute the bulk of cross-border commerce, it will serve the formal economy while the informal economy continues to route through cash and hawala networks.

Second: interoperability with mobile money. In most African countries, mobile money is the dominant payment instrument. A PAPSS that settles only between banks handles a fraction of the actual payment volume. Full interoperability between PAPSS and mobile money platforms is the necessary next step.

Third: removal of the remaining exchange controls. PAPSS can process a trade payment in hours, but if the regulations governing capital repatriation remain unchanged, the founder who wants to repatriate dividends from a pan-African operation will still face the same delays and authorisations. The plumbing is being fixed. The regulation has not yet followed.

The honest assessment

PAPSS is the most important infrastructure development for intra-African trade in a generation. It addresses the single most costly obstacle on my list — correspondent banking — and it does so at continental scale. The BEAC and BCEAO entries in 2026 make it the first payment infrastructure that both major CFA franc zones are joining simultaneously.

But infrastructure is not policy. A payment rail does not remove licensing barriers, does not harmonise tax regimes, does not create the legal certainty that makes a founder confident enough to build for a neighbouring country. Those are political decisions, and they are harder to make than building a payment system.

The risk is that PAPSS becomes proof that 'something is being done' while the structural obstacles remain untouched. That would be the worst outcome: a visible success that absorbs the political energy needed for the less visible work.

Open question: has your company already used PAPSS for a cross-border payment? If so, what was the actual experience compared to the previous correspondent-banking route?

Episode 7 — Being born pan-African

I started from a question that seemed to be about a currency. It was really about a distance.

The real issue is not which African currency will replace which other. It is whether, tomorrow, an African entrepreneur will be able to consider 1.4 billion people as a single market — or will continue to consider six million as theirs.

That is not a question of monetary sovereignty. It is a question of economic distance between Africans. And that distance, unlike many others, is reduced through engineering.

Open question, and last: if crossing costs halved in three years, which would be the first African country your company would attack — and why that one?