- Leaders at the African Union heard a speech about the Pan-African Payment and Settlement System, known as PAPSS
- New system will make it simpler for transfers to occur in local currencies rather than foreign ones
- "No people have achieved meaningful development when their economic progress depends on others", said President of African Export-Import Bank in powerful speech
A new digital payment infrastructure covering the African continent has been launched today at a meeting of government and national leaders in the region.
The Pan-African Payment and Settlement System, known as PAPSS, has been created alongside the African Union.
The aim of the new system is to bring together parts of the African economy which are currently unable to properly communicate financially and will allow local currencies to be used more easily.
It will make it easier for people to institute cross-border payments within the African continent – without having to resort to the foreign currencies which are currently often used, such as the US dollar.
According to figures, the new system may be able to reduce transaction fees on the continent by up to $5 billion.
The new system was announced at the 12th Extraordinary Summit of African Union (AU) Heads of State, which took place in Niamey in Niger.
The announcement was made by Professor Benedict Oramah, who is President of the African Export-Import Bank (which is also known as Afreximbank).
In his remarks, he said that the move would “formalise” a lot of the trade which goes on in the region.
"Today we will launch the Africa-wide digital payment infrastructure, the Pan-African Payment and Settlement System (PAPSS), that we developed in collaboration with the African Union", he said.
"It is a platform that will domesticate, intra-regional payments, save the continent more than $5 billion in payment transaction costs per annum, formalise a significant proportion of the estimated $50 billion of informal intra-African trade, and above all, contribute in boosting intra-African trade."
He also argued that there was a strong case for money transfer services to be as independent as possible in order to support the domestic economy in Africa.
"No people have achieved meaningful development when their economic progress depends on others", he said.
Due to a "renewed focus on industrial and value-chain development across the continent in trying to boost trade and investment, it is imperative that we address the economic costs of effecting so many payments in scarce foreign exchange”, he added.
The conference also explored a range of other financial themes important to the development of African economies.
These included plans to boost the Agreement for the African Continental Free Trade Area, and the institution of a $1 billion adjustment facility for those economies facing cash drains as a result of the loss of import taxes.
Africa is fast becoming a global hotspot for payments services. Learn more about this and other important markets in this sector over at our magazine pages.
