THE Pan-African Payments and Settlement System (PAPSS), a key player in the continent’s financial integration, is preparing to launch a pilot of its African currency market platform later this year. The move is aimed at simplifying cross-border transactions and boosting intra-African trade, according to a Reuters report.
The new platform will complement PAPSS’s existing payments infrastructure, which has already connected 150 commercial banks across Africa. Backed by 15 central banks, PAPSS plays a central role in enabling faster, more efficient transactions between African nations.
Enhancing cross-border trade in Africa
The African currency market platform under development is designed to tackle one of the key challenges in cross-border trade—currency conversion and exchange rate volatility. By providing a unified platform for currency exchange, PAPSS aims to facilitate smoother transactions between African countries, reducing the reliance on third-party currencies such as the US dollar and the euro.
‘The currency market will help unlock the full potential of intra-African trade by enabling businesses to transact in local currencies,’ PAPSS Chief Executive Mike Ogbalu said in an interview with Reuters.
Support from central banks and financial institutions
PAPSS is already backed by 15 central banks on the continent, signalling strong institutional support for its initiatives. The platform’s current payments system is integrated with 150 commercial banks, offering a widespread network to ease financial transactions.
The new currency market will build on this infrastructure, offering businesses and financial institutions a centralised solution for currency conversion. This is expected to lower transaction costs and speed up settlements, removing barriers that have historically hindered trade between African countries.
A key step toward AfCFTA objectives
The pilot of the African currency market aligns with the goals of the African Continental Free Trade Area (AfCFTA), which seeks to increase trade between African nations and promote regional economic integration. A seamless, cost-effective currency exchange system is considered a critical enabler of AfCFTA’s objectives.
With the new platform, PAPSS aims to bridge the gap in cross-border payments and currency settlement, helping to reduce the $5 billion annual cost of currency convertibility on the continent, according to Reuters.
What’s next for PAPSS?
PAPSS expects the pilot phase of the currency market to roll out by the end of 2025, with further integration into its broader payments ecosystem planned thereafter. The success of the pilot will determine how quickly the full platform can be implemented across the continent.
As PAPSS continues to expand its services, it is seen as a vital component in Africa’s push for deeper economic integration, driving financial inclusion and supporting businesses operating across borders.
