CBN urges financial institutions to accept PAPSS to businesses in Nigeria

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Godwin-Emefiele

The Governor of the Central Bank of Nigeria (CBN), has said that the financial institutions under its jurisdiction will accept the Pan-African Payment and Settlement System (PAPSS) and recommend it to businesses across Nigeria.

Mr Godwin Emefiele said this during the weekend in Accra, Ghana, during the launch of PAPSS.

The CBN governor described PAPSS as a breakthrough achievement for the continent, saying it would help facilitate trade and enhance payment gateways across West Africa.

Speaking at the event, Emefiele said, “CBN will ensure the financial institutions under its jurisdiction accept PAPSS and recommend it to businesses across Nigeria.”

According to Emefiele, the new payment method will aid in the formalization of trade on the continent, as well as benefit households, businesses, and financial institutions.

With the infrastructure supplied by PAPSS, he estimates that intra-African trade will expand to 35% from 15% in the next five years.

He also mentioned that, given the rapid rate of digitalization in financial services, the PAPSS could be a potential platform for boosting e-commerce in Africa.

“Businesses can be assured of an efficient and reliable payment gateway that supports the instant flow of funds and relatively the use of safe payment channels that usually comes at a high cost to households and businesses.

“Prior to the launch of PAPSS, settlements for Intra-Africa trade required a third currency and a non-African correspondent bank. This resulted in an estimated loss of close to $5 billion annually and undermined trade in African countries.

“The launch of PAPPS gives fresh opportunities and aspirations for the African continent. It will simplify cross-border transactions, reduce third currencies for intra-African transactions and remove the need for correspondent banks and ultimately amplify Intra trade significantly,” he said.

PAPSS is a cross-border financial market infrastructure that enables payment transactions across Africa, overcoming trade barriers in a continent with over 41 recognized currencies.

It is projected to increase intra-African commerce by transforming and facilitating cross-border payment, clearing, and settlement.

PAPSS solves the problem of interconnected and fragmented payment and settlement systems, which have historically hampered intra-African trade.

The platform was officially introduced for commercial usage by the Africa Export-Import Bank (Afreximbank) in partnership with the African Union (AU) and the African Continental Free Trade Area (AfCFTA).