African Payrolls Require Caution, Thorough Processes

African payrolls come with their own unique challenges even as the continent represents a growing business opportunity, an executive from an African payroll provider said May 13.

Dion Bowden, CEO of Praxima International Payroll Solutions, cited statistical claims that one-third of people under age 20 are African and that the continent would have 1 billion working-age people by 2035. He added that big tech businesses and manufacturing are expanding in various areas of the continent and that remote work is becoming possible with satellite and mobile internet services.

Mauritius, an Indian Ocean group of islands, is a particular hotspot for business process operations, whether payroll or otherwise, he said. “Think of Delaware when you think of Mauritius,” Bowden said, because it can be considered a tax haven with a business-friendly environment and reliable technology.

But the biggest challenge, like other continents, is 54 African countries each doing things their own way, Bowden said, although he noted that former British and former French colonies can have similarities in how they operate.

Political uncertainty “does blow back into payroll,” Bowden said, citing Kenya’s controversial 2024 Finance Act. The act had payroll implications but some unpopular, led to protests, and were eventually ruled unconstitutional.

In that case, where a shifting political landscape makes it unclear how to approach a payroll, Bowden recommended that “we’d rather give money to the government than give it to employees” as a lower-risk approach because it would be easier to get back from the government.

Bowden spoke at the 2025 Payroll Congress in Kissimmee, Florida.

Currency exchange rates can be another challenge, Bowden said. For example, he noted that Nigeria’s naira has an official exchange rate and a more common black market exchange rate, while Zimbabwe nominally has its own currency, Zimbabwe Gold , but even the government itself prefers to work in US dollars. The value of the naira also dropped by 50% in 2024, Bowden said, which can greatly affect employees’ wages.

Employers should have their own policy on which exchange rates they use and where they get them, but the only guidance tax agencies will give is to make a policy and stick to it, Bowden said.

Regarding technology, Bowden mentioned that poor infrastructure actually can make businesses more resilient as they build up backup power and water sources, for example. He added that WhatsApp is crucial for communicating with employees, as cell phone usage is much higher than laptops, and that payroll systems should be able to handle multiple currencies, scripts, and languages.

Caution Needed in Setup

Bowden recommended allowing sufficient time for processes to complete themselves in many areas of the payroll cycle, starting with registration. A business should make sure its entities are set up correctly and may have to open local bank accounts because in some cases payment to governments is required from a local bank account, he said. US businesses may be restricted in which banks they can use based on the banks’ investment ratings, Bowden said.

Social security registration can take the longest and is often forgotten, Bowden added.

When using an in-country provider, Bowden said the payroll department has responsibility for training the provider on their policies and providing guidance on anti-bribery, anti-corruption, and data protection laws. He recommended testing in-country providers for responsiveness and finding them on WhatsApp and Facebook. Bowden added that his own company tests providers by having them remit a small-dollar payment to the Kenya Revenue Authority to prove they know how.

Complying with tax and wage and hour laws is of course also challenging when multiple countries are involved, Bowden said, adding that preapproval might be needed on the tax treatment of payments such as severance or bonuses. In the event of an audit or similar proceeding, there might be no limit on how far back a tax agency can go when looking for records, he said.

While much can be done online, proof of payment and a stamp either from the company or from the tax agency may still be required in some cases, Bowden said. “In Africa, make sure you know where your money is going, and make sure that you’re able to check that what they say is happening is actually happening,” he said.

Bowden recommended as a best practice making a payroll calendar with plenty of space to account for disruptions, whether technological or otherwise, adding that such disruptions only tend to last one or two days, not weeks.

“Test your payment channels. Don’t go live without working out how long it takes you to get your million dollars from the US to Kenya,” Bowden said. “It’s not going that afternoon,” he said, reminding the audience that such payments will probably go through multiple banks, take longer than expected, and can result in stiff late penalties if they are late by any amount of time.