12 banks, four switching firms sign into PAPSS platform

Initiative to save Nigeria, Africa $5b in transactions cost

Chief Executiove Officer of Pan-African Payment and Settlement System (PAPSS), Mike Ogbalu yesterday announced that 12 banks and four switching companies have been onboarded into the platform.

PAPSS is a Pan-Africa payment and settlement system will be the enabling infrastructure to spur the growth of intra-African trade and commerce, with the active participation of central banks, financial institutions, regional economic communities, private sectors, and other stakeholders

The platform is also expected to save Africa more than $5 billion annually in payment

transaction costs, while it plays an increasingly significant role in accelerating the continent’s transactions underpinning the operationalisation of the AfCFTA. 

There were strong indications that more banks and switching companies are encouraged to sign up to PAPSS. 

At the launch of the platform in Accra,Ghana yesterday,  Ogbalu said:”With every bank onboarded to PAPSS, we enable thousands of their clients to trade within Africa,” Ogbalu said. 

He said every bank joining PAPSS gains access to trades with tens of thousands of end-users already connected through its growing community of financial institutions. Every central bank joining the PAPSS infrastructure extends collective reach to millions more with the resultant positive impact on intra-African Trade. 

“Together, we will create the foundational support for the innovation of trade and payment solutions which will help the continent solve uniquely African challenges, he said. 

The PAPSS pilot in WAMZ central banks has been completed and all six Central Banks have tested and gone through the trial operations, he noted.  In the last week of August 2021, all the Central Banks became live on the system and have since been sending through live transactions across the WAMZ region. 

On the journey so far, Ogbalu said project started in 2016 with various engagements to understand the existing regional payment systems, their pros, and cons and how best to approach the establishment of an Africa-wide payments infrastructure. Engagements took place with Regional Economic Communities including COMESA, East African Community, and SADC, as well as with all major payment systems operators in Africa. 

Furthermore, discussions with the West African Monetary Zone (WAMZ) commenced in 2017 and following successful interactions with them, the Central Bank Governors of the Zone agreed to implement a pilot scheme of the System as a proof of concept. 

Subsequently, systems development commenced as well as development of the regulatory framework including the PAPSS Bye Law, scheme rules and membership agreements and other establishment structures required for instituting the System. 

Wamkele Mene, Secretary General, AfCFTA Secretariat said since the commencement of trading under the AfCFTA began on 1 January, 2021, significant improvements were recorded in other key aspects of the implementation of the agreement.

These include an increase in the number of AfCFTA State parties from 35 (64%) in December 2020 to 39 (73%) at the end of last year; improvement in the agreement on the AfCFTA rules of origin from 81.8 percent to 88.6 percent;activation and operationalisation of the Dispute Settlement Body (DSB), a key pillar in the successful implementation of the agreement, in April.

The Appellate Body is also being constituted; and successful hosting of the second edition of the IATF in Durban, South Africa, in November 2021, where a record US$ 42.1 billion trade and trade-related deals were agreed, among others. 

Governor of Central Bank of Nigeria, (CBN). Godwin Emefiele said the CBN will facilitate the widespread adoption, acceptance and implementation of PAPSS. 

“The CBN will ensure that financial institutions under its jurisdictions embrace PAPSS as we confidently recommend it to businesses across Nigeria. I call on everyone to support this laudable initiative and jointly make it a success “, he said.