The Pan-African Payment and Settlement System (PAPSS), a groundbreaking initiative developed by the African Export-Import Bank (Afreximbank) to revolutionise cross-border payments and boost intra-African trade, celebrates a significant milestone as it receives a historic endorsement from the Governors of the central banks in the Caribbean region.
All eleven central banks have unanimously adopted PAPSS as the preferred system for processing the settlement of intra-regional trade transactions.
The Governors have indicated their recognition of Afreximbank’s experience and skill in using PAPSS to streamline cross-borders financial transactions throughout Africa. Consequently, Afreximbank will provide valuable guidance and support throughout the entire implementation process of PAPSS in the Caribbean region.
Operational in the six countries of the West African Monetary Zone (WAMZ) – and with transactions initiated daily by traders, SMEs and individuals – PAPSS is gaining traction on the African continent as a transformative solution enhancing the operational efficiency of cross-border payments, while promoting economic integration and trade facilitation.
Indeed, more African Central Banks stand poised to join the network, and recently five major African multinational commercial banking groups present in almost 40 countries have decided to implement the system in all their subsidiaries across Africa. With the inclusion of the CARICOM region, the system’s reach expands beyond the African continent, and its status as a global payment and settlement platform is solidified.
In adopting PAPSS, the Central Banks in the Caribbean region have recognized its immense potential for unlocking new opportunities for trade growth and cooperation within their respective jurisdictions.
By streamlining and expediting the settlement process, PAPSS will eliminate the complexities and inefficiencies that often hinder intra-regional trade, promoting monetary stability and economic development across the Caribbean.
Professor Benedict Oramah, president, and chairman of Afreximbank, said: “In keeping with the bank’s Diaspora Strategy and the African Union’s designation of the African Diaspora as Africa’s sixth region, the Caricom Central Banks’ endorsement of PAPSS vindicates Afreximbank’s efforts to promote and enhance trade between Africa and the Caribbean. With this historic decision, we have moved closer than ever before to achieving economic parity between Africa and the Caribbean Community (CARICOM).”
Also commenting on this collaboration, Dr Kevin Greenidge, Governor of the Central Bank of Barbados, said: “The Caribbean region looks forward to working closely with Afreximbank to further explore and implement the PAPSS model for intraregional trade transactions. This joint endeavor has the potential to elevate economic cooperation between Africa and the Caribbean to new heights, fostering lasting partnerships and mutual benefits for our respective regions.”
Mike Ogbalu III, chief executive officer of PAPSS, expressed his enthusiasm over this endorsement, emphasizing the importance of such collaboration in fostering closer ties and enhancing trade relationships across continents.
He stated: “This development showcases the adaptability and scalability of PAPSS, and its role as a catalyst for economic growth and prosperity in the African market and beyond. The adoption of PAPSS by the CARICOM Central Banks paves the way for further engagement between Africa and the Caribbean, stimulating trade diversification, economic resilience, and sustainable development for all participating countries. As PAPSS continues to expand its reach and impact, it reaffirms its commitment to promoting financial inclusion, reducing trade barriers, and enhancing cross-border trade across the globe.”
The Caribbean central banks and Afreximbank have decided to start a pilot project to guarantee the seamless deployment of the PAPSS system and its efficacy in the Caribbean region.
The goal of this pilot project is to identify any problems with the system before it is fully implemented. An official commercial launch of the system in the Caribbean region is expected to occur in Q4 2024.
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