Africa’s Financial Future: Tinubu Urges Adoption of PAPSS

President Bola Tinubu has urged African nations to adopt the Pan-African Payment and Settlement System (PAPSS) to improve financial integration throughout the continent. He made this appeal during the Afreximbank 32nd Annual Meetings held in Abuja, Nigeria.

Functionality of PAPSS

The PAPSS framework facilitates cross-border trade using local currencies, thereby decreasing dependence on foreign exchange and fostering economic stability. It removes the necessity for currency conversion via external intermediaries, resulting in annual savings of billions in transaction costs. The system is backed by a $3 billion clearing and settlement fund from Afreximbank and has integrated approximately 160 commercial banks across 16 countries. The PAPSS framework has also enabled instantaneous payments in local currencies, promoting innovation and enhancing overall payment efficiency across the continent. An African Currency Marketplace has been established, which allows for the trading of African currencies and provides a means for the repatriation of trapped funds in various African nations. Furthermore, PAPSS Credit and Debit Cards have been launched, allowing users to utilize national currencies in 16 countries where PAPSS is operational.

Impact on African Economy

The implementation of PAPSS is anticipated to enhance financial integration, thereby fortifying Africa’s collective resilience and fostering economic stability. Additionally, it will improve trade efficiency by lowering transaction costs and time related to cross-border trade, while also stimulating economic growth through the facilitation of investment and trade throughout the continent. With PAPSS, individuals in Africa will have the capability to execute transactions in their local currencies, thereby eliminating the necessity for foreign exchange and mitigating the risks linked to currency fluctuations. Nigeria has officially endorsed PAPSS, with the Central Bank of Nigeria (CBN) instructing all banks to embrace the system and begin initiating transactions under the new framework. This initiative is designed to enhance intra-African trade and boost the efficiency of cross-border payments. The CBN’s guidance is expected to promote the utilization of PAPSS in Nigeria, thereby supporting economic growth and development.

President Tinubu’s appeal for African nations to adopt PAPSS underscores the potential for greater financial integration and economic advancement across the continent. Given its myriad advantages, PAPSS is set to transform cross-border trade and investment in Africa. As an increasing number of countries implement the system, Africa is likely to witness substantial economic growth, enhanced trade efficiency, and greater financial stability. The outlook for Africa’s economic development appears bright with the adoption of PAPSS.