Afreximbank, AfCFTA roll-out Pan-African payment system

System provides Africa with greater capacity to conduct cross-border transactions, expand opportunities

Kampala, Uganda | ISAAC KHISA | Pan-African multilateral lender, African Export-Import Bank and the Secretariat have rolled the Pan-African Payment and Settlement System (PAPSS), revolutionalised financial market infrastructure to enable instant, cross-border payments in local currencies between African markets.

This new step is set to boost intra-African trade and underpin the implementation of the African Continental Free Trade Area (AfCFTA)

PAPSS will serve as a continent-wide platform for the processing, clearing and settling of intra-African trade and commerce payments, leveraging a multilateral net settlement system. Its full implementation is expected to save the continent more than US$5billion in payment transaction costs each year.

The platform has been developed by Afreximbank, who also acts as the main settlement agent in partnership with participating African Central banks.

The implementation of the infrastructure is taking place in collaboration with the AfCFTA secretariat with the endorsement of the African Union.

The rollout of PAPSS follows a successful pilot phase in the countries of the West African Monetary Zone (WAMZ), with live transactions done in an instant.

Professor Benedict Oramah, President of Afreximbank and chairperson of PAPSS Management Board, said:  “With the implementation of PAPSS, Africa can expect to begin to reap the fruits of the African Continental Free Trade Agreement. Afreximbank is proud to have contributed in the realization of the multi-decade dream that seemed unachievable just a few years ago”

“PAPSS is not positioned to replace existing regional and national payment systems but to collaborate and work with them in better integrating African economies for the benefit of all. We thank the African Union, the AfCFTA Secretariat, the West African Monetary Institute and African Central banks for a remarkable outcome.”

Wamkele Mene, the secretary general of the African Continental Free Trade Area, said the implementation of the agreement establishing the AfCFTA will improve intra-Africa trade, necessitating in this regard, the establishment of a payment system to facilitate affordable and efficient cross border trade transactions.

“It is on this basis that the AfCFTA secretariat strongly supports the development of a Pan African Payment and Settlement System (PAPSS) that will usher in a new phase in the African economic trajectory,” he said.

“The introduction of PAPSS provides Africa with greater capacity to conduct cross-border transactions and expand the scale of both active and latent opportunities for enhanced intra-African trade.”

Godwin Emefiele, the governor for Nigerian Central Bank, said APSS has demonstrated credibility through its successful pilot and proof of concept in the WAMZ region, a region with the diversity and complexity anticipated in the larger African context – multi-lingual, multi-currency, and multi-regulator.

Following the accomplishment of this milestone, PAPSS will now set its sights on integrating the rest of the continent into this critical infrastructure by integrating National Payment Systems, Regional Payment Systems and other financial services providers.

PAPSS was launched on July 7^th, 2019 in Niamey, Niger, at the 12^th Extraordinary Summit of the Assembly of the African Union (AU) who adopted it as a key instrument for the implementation of the African Continental Free Trade Agreement (AfCFTA).

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