AfCFTA begins pilot phase of Pan-African payment

The African Continental Free Trade Area (AfCFTA) secretariat says the Pan-African Payment and Settlement System (PAPSS) pilot phase is ongoing in six West African countries to facilitate AfCFTA’s implementation.
The AfCFTA Secretary-General, Wamkele Mene, disclosed this to journalists on Wednesday in Abuja while on an official tour to Nigeria.
PAPSS is a centralised payment and settlement market infrastructure for processing, clearing, and settling intra-African trade and commerce payments.
Adopted in July 2019 by the African Union heads of state as the payment and settlement system to support the implementation of the AfCFTA, PAPSS is expected to create new financial flows and successfully facilitate trade and other economic activities among African countries.
Afreximbank is the operator and main settlement agent for PAPSS. The bank will provide a settlement guarantee on the payment system and overdraft facilities to all settlement agents.
Interim Governing Council of PAPSS had in December 2020, in Cairo met on step towards operationalisation of the payment system developed by Afreximbank, under the auspices of AfCFTA Secretariat and AU.
Mr Mene explained that the system, which will be ready at the end of 2021, was the first major step taken in addressing some challenges related to the cost of currency convertibility under AfCFTA implementation.
“We have started a piloting phase of the Pan-African payment and settlement platform of six countries in West Africa who have switched on to the platform.
“Transactions are already happening within these six countries that are at an advanced stage of the pilot project.
“So, the platform will make a significant contribution, and our estimate is that it will reduce the cost of transactions by five billion dollars annually, being the aggregate amount that is spent on currency convertibility,” he stated.
Mr Mene further explained that Africa had 42 currencies, and the cost of the currency convertibility was a constraint to intra-Africa trade.
Explaining the situation, Mr Mene stated, “When the system is fully up and running, you will be able to transact with somebody in Kenya in naira, and they will receive Kenya shillings, and Afreximbank will be the correspondent facility.
“We are working with them as the secretariat, but they have been very strong in investing in African solutions and this Pan-African payment system certainly in the last 60 years, it is one of the most significant achievements. We are not going to have a common currency overnight in Africa. We are still going to grapple with this issue of different currencies.”
Continuing, he said, “But with the payment and settlement system, we have taken the first major step in addressing some of the challenges that are related to the cost of currency.”
We have recently deactivated our website's comment provider in favour of other channels of distribution and commentary. We encourage you to join the conversation on our stories via our Facebook, Twitter and other social media pages.
More from Peoples Gazette

Agriculture
FG tasks ECOWAS on leveraging financing strategies for agroecology
The federal government has urged stakeholders in the agriculture and finance sectors in the West Africa region to leverage financing strategies to enhance agroecology practices

Politics
Katsina youths pledge to deliver over 2 million votes to Atiku
“Katsina State is Atiku’s political base because it is his second home.”

Heading 1
FG, Katsina launch initiative to reduce maternal, neonatal deaths
He revealed that 172 local government areas across Nigeria were affected by high rates of maternal and neonatal deaths.

Hot news Home top
Plateau Killings: Amnesty urges Tinubu to end ‘cycle of bloodshed’
Amnesty said the Nigerian government’s response to the violence has been largely ineffective.

States
Easter: FRSC urges motorists in Kano to obey traffic rules
Mr Matazu said the command deployed personnel and patrol vehicles across highways.

Economy
U.S. trade tariffs will boost China-Nigeria trade ties: Chinese Envoy
Mr Yu reiterated China’s commitment to expanding market access, particularly for least-developed countries in Africa.

Abuja
Three NDLEA officers shot during raid in Abuja
Mr Marwa spoke with the injured officers by phone to wish them a speedy recovery.

States
Easter: AIG Zone 2 assures Lagos, Ogun residents of adequate security
The police boss enjoined youths in both states to be law -abiding, maintain peace and order during the celebrations.