The African Export-Import Bank (Afreximbank) started negotiations with the Central Bank of Egypt and commercial Egyptian lenders to add them to its Pan-African Payment and Settlement System(PAPSS) in 2H 2023, Al Borsa quotes Afreximbank International Cooperation Officer Christiane Abou Lahaf as saying.
PAPSS aims in part to cut African nation’s reliance on the greenback over time in regional trade and so far nine central banks have joined the platform since its launch last year. Egypt is one of the 15-20 nations that Afreximbank expects to sign up by the end of the year, a central bank source told Enterprise last week.
What is the Pan-African Payment and Settlement System:
The Pan-African Payment and Settlement System – PAPSS is a centralised Financial Market Infrastructure enabling the efficient and secure flow of money across African borders. The platform minimises risk and contributes to financial integration across the regions. PAPSS is an African Union infrastructure developed in collaboration with the African Export-Import Bank (Afreximbank) to complement trading under the AfCFTA.
PAPSS works in collaboration with central banks in the continent to provide a payment and settlement service to which commercial banks, payment service providers and fintech organisations across the continent can connect as participants.
The platform provides an alternative to current high-cost and lengthy correspondent banking relationships to facilitate trade and other economic activities among African countries through a simple, low-cost risk-controlled payment clearing and settlement system. It also serves as an avenue of expanding financial inclusion to cover the informal sector while monitoring funds transfers, thus reducing money laundering, which costs the continent several billions of dollars annually.
