Collaboration key to achieving payment statement integration – Bawumia to Central bank governors

• The AfCFTA Secretariat is located in Ghana-West Africa

• PAPSS to enhance cross-border payments in local currencies between African markets

• Digitization key to integration, Dr Bawumia

Central Bank governors in Africa have been urged to facilitate stakeholder collaboration towards achieving the integration of payment systems on the continent.

The call by Ghana’s Vice President, Dr Mahamudu Bawumia comes on the back of efforts to roll-out of the Pan-African Payment and Settlement System (PAPSS), a platform that allows instant, cross-border payments in local currencies between African markets.

Delivering the keynote address at a virtual Association of African Central Banks Annual Conference on Payment Systems hosted by the Bank of Ghana, Dr Bawumia underscored the need for cross-border payments through Digitalization in Africa.

“The achievement of the noble objectives of the African Continental Free Trade Area will largely depend on the establishment of a robust payment and settlement system that is secure and guarantees finality of payment,” the president said.

“Let me say that with the added impetus for digitalization brought on by the pandemic, Africa is now better positioned to provide the required integrated payment infrastructures and systems to boost trade. I want to also re-emphasize that stakeholder collaboration is necessary for the smooth operation of an integrated regional payment system,” he added.

As part of efforts to digitize payments and ease transactions under the African Continental Free Trade Area for member countries, PAPSS is expected to have its operational roll-out.

The system which is being developed under the supervision of the African Export-Import Bank (Afreximbank) and the AfCFTA Secretariat currently has some six African countries including Ghana currently undertaking the pilot phase.

The PAPSS is anticipated to minimize the financial cost of cross-border trade and improve financial integration as well as boost intra-African trade and investment competitiveness.

The system will for example allow a small trader group in Ghana to freely import goods from Sierra Leone, using the Ghana Cedi without making that purchase in a third currency. The system will also reduce the cost and time of doing business.