Economy

Pilot phase of Pan African payment, settlement system begins- Sec.-Gen.

Published

on

Pilot phase of Pan African payment, settlement system begins- Sec.-Gen.

By Emmanuella Anokam
The African Continental Free Trade Area (AfCFTA) Secretariat reports that the pilot phase of the Pan African Payment and Settlement System (PAPSS) is underway in six West African countries to facilitate the implementation of the AfCFTA.

ZLECAf Secretary General Wamkele Mene revealed this to reporters in Abuja on Wednesday during an official tour of Nigeria.

The Nigerian News Agency (NAN) reports that PAPSS is a centralized payment and settlement market infrastructure for the processing, clearing and settlement of intra-African trade and commercial payments.

Adopted in July 2019 by the heads of state of the African Union as a payment and settlement system to support the implementation of the AfCFTA, the PAPSS is expected to create new financial flows and successfully facilitate trade and other economic activities between African countries.

Afreximbank is the operator and main settlement agent of PAPSS. The Bank will provide a payment system settlement guarantee as well as overdraft facilities to all settlement agents.

NAN recalls that the Interim Board of Directors of PAPSS met in December 2020 in Cairo on a step towards the operationalization of the payment system which was developed by the African Import-Export Bank (Afreximbank), under the auspices of AfCFTA and AU Secretariat.

Mene said the system that would be ready at the end of 2021 was the first major step taken to address some challenges related to the cost of currency convertibility as part of the AfCFTA implementation.

“We have started a pilot phase of the pan-African payment and settlement platform for six West African countries which have switched to the platform.

“Transactions are already underway in these six countries which are at an advanced stage of the pilot project.

“Thus, the platform will make a significant contribution and our estimate is that it will reduce the cost of transactions by five billion dollars per year, which is the total amount spent on currency convertibility,” he said.

Mene further explained that Africa has 42 currencies and that the cost of currency convertibility was in fact a constraint for intra-African trade.

This, he said, made us feel inefficient and our business unnecessarily expensive, thus increasing the cost of doing business, especially micro, small and medium enterprises (MSMEs).

“When the system is fully operational, you will be able to transact with someone in Kenya in Naira and they will receive Kenyan shillings and Afreximbank will be the corresponding facility.

“We are working with them as a Secretariat, but they have been very strong in investing in African solutions and this Pan African payment system certainly over the last 60 years is one of the most important achievements.

“We are not going to have a common currency overnight in Africa, we are always going to wrestle with this issue of different currencies.

“But with the payment and settlement system, we have taken an important first step in addressing some of the challenges related to the cost of currency,” he noted.

He said he is encouraged by the way the six pilot countries understand the importance of the system to the African economy.

The Interim Board of Directors of the PAPSS is composed of the governors of the central banks of the six countries of the West African Monetary Zone (WAMZ) for the pilot phase of the PAPSS, the AU Commissioner for Economic Affairs, the Secretary General of the ZLECAf and one representative each from the African Development Bank and Afreximbank. .

The Board is responsible for providing regulatory oversight to ensure the success of the payments system. (NOPE)

(NAN)

Short Link: https://wp.me/pcj2iU-3ANi

NNN

NNN: :is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. Our journalists are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and they strive diligently to ascertain the truth in every news report. Contact: editor @ nnn.ng

Recent Posts

70% of adults in the EU have received at least one vaccine PenCom develops automatic pre-retirement verification, registration application Germany awards scholarships to 9 NFI students – Spokesman PenCom begins payment of 2.5% pension differentials – DG Development / Children’s Golf Clinic will serve as the selection process for the Junior Open JO: Osaka says the pressure is “a bit strong” after crashing Pension fund reaches N12.66trn – PenCom Housing: the Minister of Public Works welcomes the driving role of the private sector Commission opens calls for tenders for the transfer of water between basins to Lake Chad Focus on secondary schools will promote grassroots cricket, ex-federation president says Aruna breaks down after her first match at the Tokyo Olympics Law Week: Osinbajo calls for a tech-driven legal system Osinbajo wants justice to embrace technology and innovation Nigeria-Cameroon border bridge will facilitate free trade – Fashola 4 other Bethel Baptist high school students find their freedom Mfum Bridge will strengthen Nigeria’s participation in AfCFTA – Fashola COVID-19: NCDC records 213 new infections, 2 deaths Entrepreneurship, panacea for national unemployment – Ooni Fashola advocates land for infrastructure Minister calls on African countries to focus on science and technology Nigeria to reopen its mission in San Francisco in the United States 2023: Group battery support for Yahaya Bello FG will support the UNICEF GenU – Osinbajo project Fayemi reaffirms its commitment to the unity of the nation and peaceful coexistence GDP: NAEE calls for clarification on 30% of border exploration revenue Mission condemns false publication against diplomatic relations between Ghana and Nigeria Vaccines and digital infrastructure will thrive in Africa – WTO, US Law Week: Osinbajo calls for a tech-driven legal system CVR: new online registrations reach 1 million – INEC Sokoto State records 397 fires in 7 months – Official Agriculture Minister presents tools to cocoa farmers in Ondo FG to poverty reduction through sustainable agriculture Nigeria adopts eco-hydrological solutions to tackle water challenges COVID-19 creates opportunities for innovation – Osinbajo Buhari signs 982.7 billion naira supplementary budget Global private equity assets have reached $ 4.50 billion in 10 years – FMDQ Adamawa registers 774 cases of sexual and gender-based violence, condemns 297 Rugby Africa / Press release WHO Regional Office for Africa / Press release UNICAL VC charges the staff with their dedication to work Rugby Africa / Press release Buhari attends education summit in London and has bilateral talks with Prime Minister Johnson Police debunk social media report of DPO arrest for kidnapping The Foundation trains women in reusable sanitary napkins Energy Capital & Power / Press release Sella’s Olympic boxing dream ends after 67 seconds Forum calls for synergy to end banditry and insurgency Former Pope Benedict criticizes German Catholics Kanu: Ex-governor. Chukwuemeka Ezeife in court Nigerian Consulate Showcases Rich Cultures and Festivals in New York