In recognition of the importance of bolstering intra-African trade, the Afreximbank developed and introduced the Pan-African Payment and Settlement System (PAPSS) in partnership with the West African Monetary Institute (WAMI). It was formally launched in Accra on 13th January 2022.
The PAPSS facilitates cross-border transactions by providing a financial infrastructure to address currency exchange challenges thus allowing payments to be made instantly in local currencies. Therefore, cross-border payments are made and received in the traders’ respective local currencies.
Prior to the introduction of the PAPSS, payment settlements in intra-Africa trade involved the presence of multiple currencies namely, the local currencies of traders involved in the transaction and a third currency, such as the US Dollar (USD) or Euro, to act as an intermediary settlement currency. This approach affected transaction times, increased transaction expenses and exposed small and medium-sized enterprises (SMEs) to risks and hardships in sourcing for foreign exchange.
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