Africa-Press – Lesotho. The Pan-African Payment and Settlement System (PAPSS), which is expected to save the region $5bn in transaction fees and deepen trade under the African Continental Free Trade Area (AfCFTA) agreement, has gone live.
But how does it work?
The system will enable the continent to retain on home soil the $5bn paid in annual fees to foreign banks in clearing charges for third-party currencies – such as the US dollar, the British pound and the euro – used to settle trade transactions.
The PAPSS will also address some of the key structural deficiencies within Africa’s payment infrastructure, which are impediments to achieving greater levels of trading on the continent.
“Why should we require hard currencies for trade between Kenya and Uganda or between Senegal and Guinea?” asked Afreximbank president and chairperson Benedict Oramah.
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