Godwin Emefiele, Governor of the Central Bank of Nigeria, CBN, says the pan-African payment and settlement system, PAPSS, will simplify cross-border transactions and reduce third currencies for intra-African trade.
The third currencies include dollars, pounds and euro for cross-border transactions in Africa.
Emefiele said this, yesterday, in Accra, Ghana, at the launching of PAPSS.
The Africa Export-Import Bank, Afreximbank, in collaboration with African Union, AU, and African Continental Free Trade Area, AfCFTA, officially launched the platform for commercial use.
“Prior to the launch of PAPSS, settlements for intra Africa trade required a third currency and a non-African correspondent bank. This resulted in an estimated loss of close to $5 billion annually and undermined trade in Africa countries.
“The launch of PAPPS gives the fresh opportunity and aspiration for the African continent. It will simplify cross-border transactions, reduce third currencies for intra-African transactions and remove the need for correspondent Banks and ultimately amplify intra trade significantly.
“As a percentage of total trade, intra-African trade is expected to increase to 35 per cent from 15 per cent in five years with infrastructure provided by PAPSS as payments and settlements are resolved.
“With the growing pace of digitisation in financial services, which has been accelerated from the onset of the COVID-19 pandemic, PAPPS can serve as a viable platform for supporting e-Commerce in Africa.”
The CBN governor said Nigeria is excited by the potential of PAPSS, and “that is the reason we participated actively in the programme, and we have put our best efforts to ensure the realisation of the payment platform.”
Emefiele said CBN would continue to facilitate the widespread adoption, acceptance and implementation of PAPSS.
“CBN will ensure the financial institutions under its jurisdiction accept PAPSS and recommend it to businesses across Nigeria,” he said.