This week at the just concluded African Export-Import Bank (Afreximbank) Annual Meetings, five of the largest group banks – Ecobank, Standard Bank, Access Bank, United Bank of Africa (UBA) and Kenya Commercial Bank (KCB) – each signed strategic MoUs with the Pan-African Payment and Settlement System (PAPSS), which will ensure efficient processing of cross-border payments in order to promote financial integration and trade in Africa.
PAPSS was developed by Afreximbank in collaboration with the African Continental Free Trade Area (AfCFTA). It is connecting central and commercial banks, as well as payment service providers and other financial platforms, in order to streamline the transfer of funds within the continent. Before its establishment, companies used foreign banks to settle payments between two African currencies. To date, PAPSS has signed on 9 central banks including the Bank of Ghana and over 40 commercial banks. All central banks are expected to sign on by the end of 2024, and commercial banks by the end of 2025.
The PAPSS system functions as follows:
As African countries take steps toward realizing the AfCFTA agreement despite a multitude of currencies, PAPSS will be integral to financial flows and commercial activity at large in Africa.