The pilot project of the Pan Africa Payment and Settlement System (PAPSS), developed to aid business transactions among member countries in the Africa Continental Free Trade Area (AfCFTA), is underway in the six countries of the West African Monetary Zone (WAMZ), the Executive Vice President, Afreximbank, Denys Denya, has said.
Denya, who disclosed this while speaking at an event in Accra, Ghana, said the pilot project will be concluded by the end of the year. WAMZ is made up of Nigeria, Ghana, Liberia, Sierra Leone,
The Gambia and Guinea.
According to Denya, the Pan African Payment and Settlement System, developed by the Afrieximbank and the African Union, is expected to eliminate concerns of multiple currencies trading under the continental free trade area.
He said: “The system is already in place and currently going through piloting in the West African Monetary Zone, which consists of six countries. I’m expecting that before the close of the year, it should be done, and then based on the positive result, the council will take it up from there.”
PAPSS, which is a centralised payment and settlement infrastructure for intra-African trade and commerce payments, is aimed at facilitating payments as well as formalising some of the unrecorded trade due to prevalence of informal cross-border trade in Africa.
It is also expected to provide alternative to current high-cost and lengthy correspondent banking relationships to facilitate trade and other economic activities among African countries through a simple, lowcost and risk-controlled payment clearing and settlement system.
Other benefits of PAPPS for cross-border payments include, cost reduction; reduction in duration and time variability; decreasing liquidity requirements of commercial banks; decreasing liquidity requirements of central banks for settlement as well as its own payments;