A resilient financial infrastructure for emerging markets is of fundamental importance, especially as the renewal of the African Growth and Opportunity Act (AGOA) remains in doubt, and the impact of tariffs.
This is according to James Booth, head of revenue at cross-border payments company Verto, who comments: “The ongoing debate around AGOA shows how fragile global trade agreements can be and, in the context of this, how exposed emerging markets like South Africa are to external politics.
“The risk isn’t only about tariffs on goods; it’s about the after-effects and the ripple effects that these negotiations have on currency volatility, trade flows, and ultimately the ability of businesses to get paid on time and in full. For many SMEs and exporters, a delayed settlement or a swing in the rand can wipe out margins far faster than a headline tariff.”
Booth highlights that political shocks necessitate redundant, multi-route payment mechanisms to maintain liquidity and minimize currency exposure during periods of heightened uncertainty.
“This is why cross-border payments infrastructure is such a critical piece of the puzzle. Reliable, redundant, and transparent payment rails give businesses a buffer against these type of political shocks, by ensuring that funds move quickly and securely, even as corridors re-wire and adapt to new technologies. In practice, that means access to multiple payment routes, and the ability to settle in alternative currencies when volatility spikes.”
He projects that constrained trade access to established partners will accelerate diversification into new markets, underscoring the necessity for fintech providers to enable this shift immediately.
“We see a pivot in trade patterns. If US access becomes constrained, businesses will increasingly look to intra-African flows, the Middle East, and Asia as growth markets. Fintechs and payment providers need to be ahead of that curve, opening up new corridors and making it just as seamless to settle with partners in Lagos, Nairobi, Dubai, or Hong Kong for example,” he says.