Management of The Pan-African Payment and Settlement System (PAPSS), says although the focus of the framework is to increase cross-border trade with the use of local currencies, it will be a gradual process for a full implementation to materialise.

As a pillar of the African Continental Free Trade Area (AfCFTA), PAPPS is seeking to create a platform that will wean the continent off the reliance on foreign currencies which reportedly accounts for some $5 million in capital flight annually across Africa.

PAPSS, established by the African Export-Import Bank (Afreximbank) and the Africa Continental Free Trade Area secretariat, is a financial market infrastructure that is seeking to provide a secure and efficient channel for processing cross-border payments; thus ensuring speed, affordable cost and reliability in order to facilitate intra-African trade.

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Speaking to Joy News’ Blessed Sogah on Foreign Affairs on the sidelines of the Afreximbank in Accra on the status of the rollout, John Bosco Sebabi, Deputy Chief Executive, Pan-African Payment and Settlement System (PAPSS), said implementation of the programme would have been a lot easier if African countries had a common currency.

“If you look at where we are and where we started from as African countries, we are independent countries, we have 41 currencies to date and we have certain stages of economic integration that we need to go through. This would have been easier if we started in 1963 with one currency when countries had not established their own currencies then you begin as one. However (the stage) where we are now, we need to transact (trade) in what we have,” he said.

He added that there are so many fundamental changes that Africa needs to go through in order to attain a monetary union.

“This is the process that even Europe went through. So what we are pursuing is closely similar to what was pursued in Europe,” John Bosco noted.

Touching on how the framework will operate, Mr. Sebabi explained that “as (PAPSS), we work with Central Banks and they provide the settlement funds”.

In a bid to drive private sector participation, the Pan African Payment and Settlement System (PAPSS) signed a memorandum of understanding (MoU) with the United Bank for Africa (UBA) Plc on the sidelines of the 30th Afreximbank Annual Meeting (AAM) opening ceremony in Accra, Ghana to facilitate settlements of cross-border transactions on the continent.

John Bosco Sebabi told Joy News that the incorporation of private banks was laudable as he argues that the move is in line with the tiered approach towards creating a common African market.

“We launched the Pan-African Payment and Settlement System last year (in Accra) in January, and we have now nine countries that have joined and more are coming soon and over 65 commercial banks that have joined and are transacting in the West Africa monetary zone,” he explained.

The PAPSS executive is urging African governments and private sector players across the continent to embrace the scheme in order to accelerate Free Trade in Africa.