The Pan-African Payment and Settlement System (PAPSS) achieved a significant milestone in enhancing cross-border trade within Africa.
On Monday, during the 30th anniversary celebrations and annual meetings of Afreximbank in Accra, Ghana, PAPSS signed memorandums of understanding (MOUs) with five multinational commercial banking groups, signifying a remarkable advancement in promoting economic integration and facilitating more efficient financial transactions across the continent.
These banking groups include Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group and UBA Group.
PAPSS has stated that these strategic partnerships have the objective of revolutionising cross-border transaction settlements across nearly 40 countries covered by these banks.
The aim is to leverage the extensive network of subsidiaries and representative offices in major African economic centres, enhancing efficiency, transparency and reliability in intra-African settlements.
To achieve this, PAPSS is expected to seamlessly integrate with the existing systems of the partnering banking groups. As part of this collaboration, the African commercial banks will open their African footprints to PAPSS, enabling transaction settlements and encouraging Fintech participation through various banking channels such as mobile app banking and e-banking.
Prof Benedict Oramah, president of Afreximbank, expressed his enthusiasm for the signing of these MOUs, describing it as a significant stride in realising the long-standing vision of Africa’s leaders who conceived the idea of a payment and clearing union six decades ago.
He emphasised that with the backing of these African commercial banks, PAPSS will not only facilitate cross-border trade and payments but also contribute to the strengthening of African currencies while fostering increased intra-African trade and investments.
The partnerships were also praised by Wamkele Mene, secretary-general of the African Continental Free Trade Area (AfCFTA), who hailed them as a bold step towards fully operationalising PAPSS for the benefit of African traders and small and medium-sized enterprises (SMEs) in implementing the AfCFTA agreement.
Mike Ogbalu III expressed enthusiasm about these collaborations, stating that “these partnerships with Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group, and UBA Group mark a significant milestone in the journey toward a more integrated and efficient African banking landscape.
“By embracing PAPSS’ Commercial Bank Settlement Model, these banks are helping build a robust continental platform for fostering cross-border payments, thereby paving the way for financial inclusion and substantial continental economic development,” Ogbalu III, the chief executive officer of PAPSS said.
The implementation of these MOUs will occur gradually, in partnership with the central banks of the countries where the five banking groups operate. PAPSS noted that clients of these banks will be informed through regular communication channels once the service becomes available in their respective countries.
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