Ecobank has a Pan African switch, already connected to Pan-African Payment and Settlement System – Akinwuntan

Managing Director/Regional Executive, Ecobank Nigeria, Patrick Akinwuntan has described the recently launched Pan-African Payment and Settlement System (PAPSS) as a critical enabler for intra Africa trade. Akinwuntan who spoke on Arise TV on the launch of the payment settlement system regulatory framework, emphasized that the new payment method will serve as a backbone through which all the countries in Africa are able to actualize transactions done within the free trade area, adding that it will also create employment, wealth, and deliver values to exporters on the continent.

“This common payment platform will enable Africa to move intra trade from the current 16%, representing $70 billion to the range of 50-55% in the next two to three years. This is huge because we could be talking about $300 billion dollars intra African trade close to 15% of Africa GDP. Besides, PAPSS will also eliminate payment delays, third party currencies as well as benefit households, small businesses, and financial institutions. This is positive developments for intra Africa trade. It is a step in the right direction. It will promote cross border trade for African exporters, liberalize payments and will deliver payment that delivers value. Africa is here for real business. Africa is ready. Let’s go for it,” he said.

Further, Mr. Akinwuntan disclosed that “Ecobank is a supporter of this initiative. Today, we can reach up to 35 countries because we already have a Pan African switch, and we are already connected to PAPSS. I call for collaboration of all stakeholders to achieve the desired objectives; we have the key industry sectors that deals on Pan African trade. We need to go through with them, helping them to see the practical possibilities. We have a responsibility to take this message to them that if they want to do any transaction across Africa, they don’t need to look for an international bank. PAPSS will work the same way NIBSS works in Nigeria.”

PAPSS, developed by Afreximbank, is expected to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa. At the launch, Prof. Benedict Oramah, the President and Chairman of the Board of Directors of Afreximbank, said “we are eager to build upon AfCFTA’s creation of a single market throughout Africa. PAPSS provides the state-of-the-art financial market infrastructure connecting African markets to each other, thereby, enabling instant cross-border payments in respective local African currencies for cross-border trade.

“Afreximbank as the main settlement agent for PAPSS, provides settlement guarantees on the payment system and overdraft facilities to all settlement agents, in partnership with Africa’s participating Central Banks. “PAPSS will effectively eliminate Africa’s financial borders, formalise and integrate Africa’s payment systems, and play a major role in facilitating and accelerating the huge AfCFTA-induced growth curve in intra-African trade.” He stated.

Also speaking at the event, PAPSS’s Chief Executive Officer, Mr Mike Ogbalu, emphasised that the payment system was not designed to compete with or replace existing payment systems. He said it would facilitate the connectivity level that brings all payments systems together into one network that was interoperable, efficient and affordable. “PAPSS is designed to make our currencies regain value to domesticate intra-Africa payments in this journey toward African prosperity. This is done while providing the superhighway which connects others to reach every part of this continent as we seek to create the Africa that we want.”

The PAPSS pilot in WAMZ central banks has been completed and all six central banks have tested and gone through the trial operations. In the last week of August 2021, all the central banks became live on the system and have since been sending through live transactions across the WAMZ region. PAPSS has been successfully piloted in the six countries of the West African Monetary Zone, and promises to deliver multiple advantages and efficiencies to intra-African trade payments. As a major supporter of this initiative, Ecobank is already connected to PAPSS.