Payment System That Seamlessly Converts Currency To Boost Intra-Trade

By Juma / Published January 14, 2022 | 10:14 am

KEY POINTS

Pan-African Payments and Settlement System (PAPSS), Africa’s new cross-border payment system, was launched in Ghana by the Afreximbank in partnership with the African Continental Free Trade Area (AfCFTA) Secretariat.

KEY TAKEAWAYS

The platform will facilitate instant cross-border payments in local currencies between countries minimizing risk and contributing to financial integration across the regions.

The platform will facilitate instant cross-border payments in local currencies between countries minimizing risk and contributing to financial integration across the regions.

“The commercial roll-out is timely and set to boost intra-Africa trade significantly by making cross-border payments less reliant on third currencies, and is set to save the continent up to US$5 billion dollars annually, which is the amount currency convertibility costs Africa,” Wamkele Mene, Secretary-General, AfCFTA Secretariat disclosed.

Ghanaian Vice President Mahamudu Bawumia said the PAPSS would help drive the intra-African trade to stimulate industrialization and promote sustainable and inclusive economic growth in Africa.

“This is an African solution for an African problem. It is the most practical and most important achievement in payment system integration on the continent since independence from colonial rule. This is the closest we have come as a continent towards the vision of issuing a common currency,” he added.

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.

“Globally, a functioning payment infrastructure underpins international trade. An efficient payment system unifies fragmented markets & supports other trade services such as trade finance,” Prof. Benedict Oramah, President of Afreximbank said during the launch.

About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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