Ghana’s President, Nana Akufo-Addo, says the inauguration of the Pan-African Payment and Settlement System (PAPSS) will accelerate transactions in Africa.
Akufo-Addo, represented by Vice President Dr Mahamudu Bawumia, spoke at the inauguration of PAPSS in Accra, Ghana, monitored virtually by the News Agency of Nigeria (NAN).
According to him, the ground-breaking platform will save Africa more than five billion dollars annually in payment transaction costs, while underpinning the operationalisation of the African Continental Free Trade Area (AfCFTA).
He also commended the African Export-Import Bank (Afreximbank) and AfCFTA Secretariat for the establishment of the payment system,
The Ghanaian president also commended the bank for citing PAPSS as a major leap in releasing the continent from overdependence on external players and factors in achieving a long yearned-for acceleration in intra-continental trade and investment.
“This inauguration is a result of many months of hard work, resolve and commitment toward achieving set objectives for the growth of the continent in trade.
“All Central Banks in Africa must now join up and ensure seamless transfer of funds deploying this most practical and important African solution to an African problem,” he said.
He also complimented the pan African significance of Ghana hosting the event as an indication of the hard-won struggle for economic self-determination following the political decolonisation of the continent over 60 years ago.
NAN reports that PAPSS, developed by Afreximbank, is expected to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.
Prof. Benedict Oramah, the President and Chairman of the Board of Directors of Afreximbank, said “we are eager to build upon AfCFTA’s creation of a single market throughout Africa.
“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 the Afreximbank head, 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.’’
In his presentation, PAPSS’s Chief Executive Officer, Mr Mike Ogbalu, emphasised that the payment system was not designed to compete with or replace existing payment systems.
He said it would facilitate the connectivity level that brings all payments systems together into one network that was interoperable, efficient and affordable.
“PAPSS is designed to make our currencies regain value to domesticate intra-Africa payments in this journey toward African prosperity.
“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.”
The AfCFTA Secretary-General, H.E Wamkele Mene appreciated the role and commitment of the continent’s Heads of States and Governments through the African Union.
NAN reports that inauguration of PAPSS was witnessed by former President of Nigeria and Chairman of the Intra-Africa Trade Area (IAFTA) Advisory Council, Olusegun Obasanjo, and H.E Mahamadou Issoufou, former President of Republic of Niger.
Also present were Mr Godwin Emefiele, Governor, Central Bank of Nigeria and Chairman PAPSS Governing Council, the representatives of the Presidents of Egypt and Uganda (and DRC representing Chair of AUC.
PAPSS has been successfully piloted in the six countries of the West African Monetary Zone, and promises to deliver multiple advantages and efficiencies to intra-African trade payments.