Trade experts and Africa’s private sector have welcomed commencement of the continental payments infrastructure, Pan-African Payment and Settlement System (PAPSS), saying it will bring convenience to trading under the AfCFTA and enhance cross-border transactions.
The experts, speaking to the Single African Market, unanimously emphasised that the platform will drastically cut transaction costs for businesses and support the development of digital and e-payment systems across the continent.
“Payments for the supply of goods and services is a key element of every trading system, and in Africa that’s a huge challenge we’ve had over the years with the different trading blocks.
“Even in West Africa, we have countries that trade with different currencies. Much as we are still able to trade, the inefficient payment systems impact on trading activities,” said Seth Twum Akwaboah, Chief Executive Officer of the Association of Ghana Industries (AGI).
He further added that having a smoother payment system that makes it easier for people to trade under the AfCFTA is going to be an efficient way of promoting trade within the continent.
Trade expert and Ghana Chapter President of Borderless Alliance, Ziad Hamoui, equally shared in the optimism that the recently launched PAPSS is going to help accelerate economic development and inter-payments across Africa by allowing traders – buyers and sellers – to undertake transactions in their local currencies.
“Traders will no longer need to open foreign currency accounts or deal with multiple currency conversions with huge and unnecessary transaction costs,” he noted.
Considering the fact that efforts to streamline or converge the various currencies across the continent has failed, specifically with the ECO, the only way round was to leapfrog those initiatives to create a continent-wide payment system, according Emmanuel Doni-Kwame, Executive Director of the International Chamber of Commerce (ICC) Ghana – who adds that commencement of the payment infrastructure is good news to the business community.
“A payment system solves a lot of problems for those involved in international trade; it reduces transaction cost and forex losses, but the key thing is getting access to various markets within the continental free trade area,” he further stated.
Executive Director of the AfCFTA Policy Network, Louis Yaw Afful, sees the PAPSS as a huge relief for payment settlements and transfers among Africa’s traders and investors.
“It’s going to bring a lot of competition for our payment system and the likes of MasterCard and Visa, because this goes beyond cross-border payments and exchanges – it is setting the pace for a single African currency,” he said.