The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has said the newly launched Pan-African Payment and Settlement System (PAPSS) will simplify cross-border trade and reduce the heavy dependence on the US dollars, Pounds, Euro and other foreign currencies on intra-African trade.
He said this in Accra, Ghana, at the launch of PAPSS.
Emefiele pointed out that PAPPS is a breakthrough achievement for the continent and would help facilitate trade and enhance payment gateway across West Africa.
The new payment solution, according to him, would contribute towards formalising trade in the continent, adding that it would be beneficial to households, firms and financial institutions in the continent.
The CBN governor estimated that intra-African trade would increase to 35 per cent, from 15 per cent in the next five years with infrastructure provided by PAPSS and also observed that with the growing pace of digitalisation in financial services, the PAPSS could serve as a viable platform for supporting e-commerce in the continent.
“Businesses can be assured of an efficient and reliable payment gateway that supports the instant flow of funds and relatively the use of safe payment channels that usually comes at a high cost to households and businesses.”
“CBN will ensure the financial institutions under its jurisdiction accept PAPSS and recommend it to businesses across Nigeria,” Emefiele said.
Ghana’s President, Nana Akufo-Addo, who was represented by the country’s Vice President, Dr. Mahamudu Bawumia, said the platform would save Africa more than $5 billion annually in payment transaction costs, while it plays an increasingly significant role in accelerating the continent’s transactions underpinning the operationalisation of the AfCFTA.
President and Chairman of the Board of Directors of Afreximbank, Prof. Benedict Oramah said the ban was eager to build upon the African Continental Free Trade Area’s creation of a single market throughout Africa, and PAPSS provides the state-of-the-art financial market infrastructure connecting African markets to each other thereby enabling instant cross-border payments in respective local African currencies for cross-border trade.
PAPSS is a cross-border financial market infrastructure enabling payment transactions across Africa, bridging trade challenges in a continent with over 41 known currencies. It is expected to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.
PAPSS provides the solution to the disconnected and fragmented nature of payment and settlement systems that had long impeded intra-African trade.
The Africa Export-Import Bank (Afreximbank), in collaboration with African Union (AU) and African Continental Free Trade Area (AfCFTA), officially launched the platform for commercial use.