The Pan-African Payment and Settlement System (PAPSS) has been launched in Accra to facilitate payment transactions across the African continent.
Speaking at the launch, Wamkele Mene, the secretary general of the African Continental Free Trade Area(AfCFTA) says the launch of PAPSS gives practical meaning to Pan Africanism adding it will greatly boost intra-African trade.
Mene was hopeful the continent’s leaders will fully commit to the implementation of the commercial payment system.
He said, “… Today, we have the opportunity to give practical meaning and practical content to this pan Africanism. PAPSS is a pioneering effort in achieving a pan-African Payment and Settle System which will enable Africa to reduce reliance on third currencies and more importantly there is the potential to significantly improve intra-African trade.”
He commended the African Export-Import Bank (Afreximbank) for spearheading the establishment of PAPSS
The PAPPS platform is expected to create a seamless business transaction without worrying about third currency involvement and other currency conversion challenges.
PAPSS is a centralised payment and settlement infrastructure for intra-African trade and commerce payments.
This platform is expected to facilitate payments as well as formalise some of the unrecorded trade due to the prevalence of informal cross-border trade in Africa.
It will also provide an alternative to current high-cost and lengthy correspondent banking relationships to facilitate trade and other economic activities among African countries through a simple, low-cost and risk-controlled payment clearing and settlement system.
The benefits of PAPPS for cross-border payments include cost reduction; reduction in duration and time variability; decreasing liquidity requirements of commercial banks; decreasing liquidity requirements of central banks for settlement as well as its own payments; and strengthening Central Banks’ oversight of cross border payment systems.