The United Nations Economic Commission for Africa (UNECA), has adopted a system of payments to proceeds made from the African Continental Free Trade Area (AfCFTA).
The Acting Executive Secretary of UNECA, Antonio Pedro said this on the sideline of the ongoing 9th Session of the Africa Regional Forum on Sustainable Development in Niamey, Niger.
Pan-African Payment and Settlement System (PAPSS) is a cross-border, financial market infrastructure enabling payment transactions across Africa.
Pedro said that the continent had many currencies and PAPSS is a platform to make intra-African trade easy.
“So this is about simplifying the procedures and some of the binding constraints to intra-African trade.
“We have so many bottlenecks and payment systems are one of them. It will facilitate regional integration and financial inclusion. So that is the essence of it. It is still a work in progress,” he said.
The Acting Executive Secretary said Afreximbank was, however, devoting a lot of attention to making the payment platform fully operational soon.
“And it will take us beyond the efforts that regions are making to have common currencies,” he said.
PAPSS is planned in detail to enable individuals, businesses and governments to make instant cross-border payments in more than 40 different African currencies and makes cross-border trade simple.
It was inaugurated by Afreximbank with the support of the AfCFTA Secretariat in Sept. 2022.
It ensures instant or near-instant transfers of funds between originators in one African country and beneficiaries in another.
A payer issues a payment instruction in local currency to the bank or payment service provider.
The payment instruction is sent to PAPSS and carries out all necessary validation checks on the payment instruction.
The payment instruction is then forwarded to the receiver or beneficiary’s bank or payment service provider.
The beneficiary’s bank clears the funds to the beneficiary in the local currency.