PAPSS will effectively eliminate Africa’s financial borders, formalise , integrate Africa’s payment systems – Afreximbank
Jan. 14, 2022
Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, says the bank is eager to build upon AfCFTA’s creation of a single market throughout Africa.
Oramah said this at the inauguration of Pan-African Payment and Settlement System (PAPSS) in Accra, Ghana on Thursday.
“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.
“Afreximbank as the main settlement agent for PAPSS, provides settlement guarantees on the payment system and overdraft facilities to all settlement agents, in partnership with Africa’s participating Central Banks.
“PAPSS will effectively eliminate Africa’s financial borders, formalise and integrate Africa’s payment systems, and play a major role in facilitating and accelerating the huge AfCFTA-induced growth curve in intra-African trade.”
According to him, PAPSS provides the solution to the disconnected and fragmented nature of payment and settlement systems that have long impeded intra-African trade.
“Prior to PAPSS, over 80 per cent of African cross-border payment transactions originating from African banks had to be routed offshore for clearing and settlement using international banking relationships.
“That posed multiple challenges, ranging from payment delays to operational inefficiencies and compliance concerns for the disparate regional payment systems.’’
Also speaking, PAPSS’s Chief Executive Officer, Mr. Mike Ogbalu, noted that the payment system was not designed to compete with or replace existing payment systems.
“PAPSS is designed to make our currencies regain value to domesticate intra-Africa payments in this journey toward African prosperity.
He said it would facilitate the connectivity level that brings all payments systems together into one network that was interoperable, efficient and affordable.
“This is done while providing the superhighway which connects others to reach every part of this continent as we seek to create the Africa that we want.”