National Capital
Fri, Aug 07, 2026, 00:26
How Can African Countries Settle with Russia? Alternatives to SWIFT
21:56
The transformation of Russia’s previous foreign economic model is linked to the need to strengthen its position on the African continent. The intensification of economic cooperation between Russia and African countries requires solving a number of problems, one of which is expanding the use of national currencies in bilateral settlements. Settlements in national currencies are complicated by the fact that the volume of Russian exports to African countries significantly exceeds imports from them. As a result, Russian exporting companies accumulate substantial amounts of low-liquidity African national currencies, while settlements in dollars, euros, or potentially rubles are difficult for African importers.
To develop settlement and payment relations between financial institutions of Russia and certain African countries (primarily North Africa), the possibility of joining the Buna cross-border multi-currency payment system created in 2018 by the Arab Monetary Fund could be considered. Buna is a real-time gross settlement system that enables commercial banks, central banks, and other financial institutions in the Arab region and beyond to send and receive payments in both Arab currencies and major international currencies. Currently, payments are carried out in six currencies: US dollar, euro, Saudi riyal, Egyptian pound, Jordanian dinar, and UAE dirham.
Buna also allows currency exchange operations either directly with correspondent banks outside the platform or with participating banks on the platform. However, the system does not perform automatic currency conversion. For a conversion transaction to occur, participants must pre-approve the proposed exchange terms, and the transfer of funds in one currency takes place simultaneously with the transfer in another currency.
One alternative channel for settlements between Russian enterprises and their African partners could be the use of cryptocurrencies. On September 1, 2024, the Bank of Russia launched an experiment to create a platform for using cryptocurrencies in international settlements. However, the use of cryptocurrencies for cross-border payments raises a number of issues. One of them is that under current Russian legislation, cryptocurrency is considered property; therefore, income derived from cryptocurrency transactions is subject to taxation.
Currently, Russian participants in foreign economic activity are allowed to use digital financial assets (DFAs) in international settlements. Payments using DFAs allow exporters and importers to conduct foreign trade transactions directly, without banks, significantly reducing transaction costs. DFA payments are carried out online using blockchain technology, which minimizes fraud risks and increases trust between foreign trade partners, since transaction information cannot be altered or falsified by one party.
Thus, new mechanisms for international settlements involving Russian companies are currently being tested. In the near future, they may become an alternative to SWIFT, which is under the control of the United States and its allies.
Author: Doctor of Economics, Professor at the Department of World Economy and World Finance, Financial University under the Government of the Russian Federation Igor Alekseevich Balyuk.
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