Africa now better positioned to provide the required integrated payment and settlement systems to boost intra-Africa trade – Dr Bawumia
Vice President of the Republic of Ghana, Dr Mahamudu Bawumia, has said Africa is now better positioned to provide the required integrated payment and settlement systems to boost trade among African countries.
According to the Vice President, the continent’s readiness is on the back of the added impetus for digitisation by African governments brought about by the Covid-19 pandemic.
Delivering the Keynote address at a webinar organised by the Association of African Central Banks on the theme; The Role of Integrated Payment Systems for Intra Africa Trade, the Vice President noted intra-Africa trade is constrained by a number of factors with some being inadequate trade infrastructure, tariff and non-tariif barriers, non-existence of cross border payments and settlement systems among others.
With the African Continental Free Trade Agreement (AfCFTA) expected to resolve most of the challenges or factors hindering intra-Africa trade, the Vice President noted the establishment of a strong regulatory framework for the development of an integrated payments and settlements system is essential to boosting intra-African-trade.
In view of the need for a strong regulatory framework for the development of an integrated payments and settlements system to boost intra-Africa trade, the Vice President commended the creation of the Pan-African Payment and Settlement System (PAPSS) by the African Export-Import Bank (Afreximbank) and AfCFTA Secretariat which is currently being piloted and yet to be rolled out for cross border payments and settlements.
PAPPS is a revolutionary Financial Market Infrastructure to enable instant, cross-border payments in local currencies between African markets.
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By simplifying cross-border transactions and reducing the dependency on hard currencies for these transactions, PAPSS is set to boost intra-African trade significantly and underpin the implementation of the African Continental Free Trade Area (AfCFTA).
PAPSS will serve as a continent-wide platform for the processing, clearing and settling of intra-African trade and commerce payments, leveraging a multilateral net settlement system. Its full implementation is expected to save the continent more than US$5 billion in payment transaction costs each year.
Speaking about the Pan-African Payment and Settlement System (PAPSS), Dr Bawumia urged all African Central Banks to stand ready to integrate their national payments and settlements systems to the PAPPS when ready for continent-wide implementation.
“As custodians of payments systems, Central Banks must take the lead in the payments and settlements integration effort, to this end, the active support of all African Central Banks and supervisors of payments systems will be required to ensure the seamless transfer of funds to support intra-regional trade across the continent,” he stated.
