Friday, January 14, 2022

ACCRA, GHANA: President Yoweri Museveni has hailed the partnership between the African Export-Import Bank (Afreximbank) and the Secretariat of African Continental Free Trade Area (AfCFTA), in line with the decisions of the 12th and 13th Extraordinary Sessions of the Assembly of Heads of State and Government of the African Union, to launch the Pan-African Payments and Settlement Systems (PAPSS), a platform that facilitates instant cross-border payments in local currencies between countries is a welcome development.

“I would like to commend you and your team for successfully piloting the PAPSS in the six countries that make up the West African Monetary Zone (WAMZ) despite its multi-currency and bi-lingual makeup. I look forward to that time when traders from the remaining parts of Africa will take advantage of the platform to ease cross-border transactions, reduce the dependency on hard currencies for these transactions and bring about a significant boost in intra-African trade,” he said.

In a statement read for him by the Minister of Finance, Planning and Economic Development Matia Kasaijja, the President apologized for his absence at the launch and delegated the Minister.

“This is an event that I would have liked to attend in person, but I am unable to do so due to prior domestic commitments. I have, however, delegated the Hon. Matia Kasaija, Minister for Finance, Planning and Economic Development, to represent me at the launch.

While wishing you a successful launch event, and a Prosperous New Year, 2022, please accept, the assurances of my highest considerations,” he said.

The President was invited by H.E. Wamkele Mene, the Secretary-General, African Continental Free Trade area secretariat and Prof. Benedict Orama, President and Chairman of the Board of Directors of the African Export-Import bank to attend the commercial launch of the Pan-African Payment and Settlement System (PAPSS) that took place at the Kempinski Hotel Gold Coast City in Accra, Ghana, on Thursday, 13th January 2022.

The ceremony was held under the theme “Connecting Payments, Accelerating Africa’s Trade”.

Ghana’s Vice President Mahamudu Bawumia said Africa’s new cross-border payment system will save the continent billions of dollars in annual transaction costs and bolster shipments in the world’s largest free-trade zone. 

Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN), said the Pan-African payment and settlement system (PAPSS) will simplify cross-border transactions and reduce third currencies for intra-African trade. The third currencies include dollars, pounds and euro for cross-border transactions in Africa.

PAPSS is a centralised payment and settlement infrastructure for intra-African trade and commerce payments developed in collaboration with the African Export-Import Bank and Afrexim bank. It will facilitate payments as well as formalise some of the unrecorded trade due to prevalence of informal cross-border trade in Africa.

It will also provide 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.