Pan-African Payment Platform Will Reduce Dollar, Other FX Usage – Emefiele

Godwin Emefiele, governor of the CBN, who made known on Thursday in Accra, Ghana, at the launching of PAPSSsaid third currencies include dollars, pounds and euro for cross-border transactions in Africa

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.

Speaking at the event, Emefiele said the launch of PAPPS is a milestone reflecting collective efforts in building an infrastructure that enhances payment gateway across West Africa.

The CBN governor explained further that the platform would benefit households, businesses, and financial institutions towards Africa’s growth as well as formalise trading activities not reflected in the official trade data.

According to him, “For example, businesses can be assured of an efficient and reliable payment gateway that supports the instant flow of funds and relatively the use of safe payment channels that usually comes at a high cost to households and businesses.

“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% from 15% 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, PAPSS 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.