The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has said that the Pan-African Payment and Settlement System (PAPSS) will enhance cross-border transactions across Africa.
Mr Emefiele, who spoke on Thursday in Accra, Ghana, at the launch of PAPSS, noted that it will also reduce the use of other currencies like dollar, pound, euro, and others, in intra-African trade.
The PAPSS platform was launched by the Africa Export-Import Bank (Afreximbank), in collaboration with African Union (AU) and African Continental Free Trade Area (AfCFTA).
The platform is a cross-border financial market infrastructure enabling payment transactions across Africa, in order to ease trade challenges in a continent with over 40 currencies.
Mr Emefiele told attendees at the launch Thursday that the payment platform would benefit households, businesses, and financial institutions working around Africa’s growth.
H added that the launch of the platform is a milestone in efforts to build pan-African infrastructure that enhances payment gateway across West Africa.
He said: “For example, 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.
“Prior to the launch of PAPSS, settlements for intra Africa trade required a third currency and a non-African correspondent bank. This resulted in an estimated loss of close to $5 billion annually and undermined trade in Africa countries.
“The launch of PAPPS gives the fresh opportunity and aspiration for the African continent. It will simplify cross-border transactions, reduce third currencies for intra-African transactions and remove the need for correspondent Banks and ultimately amplify intra trade significantly.”
The CBN governor explained that as a percentage of total trade, intra-African trade is expected to increase to 35 per cent from 15 epr cent in five years with infrastructure provided by PAPSS as payments and settlements are resolved.
“With the growing pace of digitisation in financial services which has been accelerated from the onset of the COVID-19 pandemic, PAPSS can serve as a viable platform for supporting e-commerce in Africa,” he explained.
The Nigerian government is excited by the potential of PAPSS, he said, adding that the nation’s participation in the programme was greatly influenced by the belief.
“We have put our best efforts to ensure the realisation of the payment platform,” he said, maintaining that the CBN would continue to facilitate the widespread adoption, acceptance and implementation of the platform.
In his remarks, Wamkele Mene, AfCFTA Secretary-General, expressed optimism about the launch of the pan-African payment and settlement system, saying it would enable Africa to reduce reliance on third currencies and boost intra-Africa trade.