Central banks from 11 African countries have signed up to the Pan-African Payment and Settlement system (PAPPS).

The system, launched by the Africa Export-Import Bank in partnership with the AU, is expected to cut costs and simplify trade among member states, reports CNBC Africa

Most intra-African payments are currently routed through the US or Europe first, which the Afreximbank estimates costs US$5 million a year in fees. PAPPS will allow African trade partners to conduct business in their local currencies, instead of having to resort to foreign currency.

‘Trade goes well where payments can be made easily, and this is why we can only see trade pick up if we see improvement in efficient payments,’ says John Bosco Sebabi, PAPSS deputy CEO.

More than 80 commercial banks, including Southern Africa’s Standard Bank, have signed up to the system, although most participants are from the West African economic zone.

Central banks will act as regulators and clearance agents, while other participants include fintechs, payment service providers and their customers comprising businesses across the region.

7 November 2023
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