Managing Partner at Koranteng & Koranteng Legal Advisors, Afua Adubea Koranteng, is confident that constant communication and more collaboration between central banks and other regulatory bodies on the continent will better position them to harness benefits of the Pan African Payment and Settlement System (PAPSS) – the cross-border, financial market infrastructure enabling payment transactions across Africa.
According to her, as measures are being considered those two cannot be left out – given the need for a standardised form of rules and procedures to enhance intra-Africa trade processes.
“Collaboration between the central canks will lead to a more standardised form of rules and procedures for an enhanced PAPSS. I would say these are key measures.
“The various central banks are in control of what happens within the PAPSS. It’s clear they have got it under their thumb and know what to do as regulators. Imagine if all central banks have regulations that slightly differ? So the issue is more collaboration to get to a point where there is a standard form as far as the system is concerned,” she said.
She made these remarks at the Money Summit organised by the Business and Financial Times, focused on the ‘Africa’s Payment and Settlement System; Opportunities, Challenges, and the Way Forward’, where she said the system could help make Africa’s local currencies stronger – given that it allows for trading with each country’s currency.
“The beauty of it is that most countries will be reliant on their local currency, and it will beef-up respective currencies. Imagine if each country had a strong currency, there would be no need for external dollars.
“The PAPSS’ success will also be dependent on the fact that each country’s currency will be useful, and it only becomes useful when it is strong. I believe it is a real game-changer, and the more commercial banks sign onto the system it will revolutionalise payment systems on the continent,” she said.
Education
Ms. Koranteng also holds that the success of PAPSS depends on how widely business folk understand the system; and for that matter, each regulator must sensitise the public to carry them along.
“I met a businessman at the banking hall, and he did not know anything about PAPSS. It is critical that you have the whole public, starting from SMEs, get to a point where they know and understand the system; then, the system’s upscaling will be far increased,” she noted.
Industrialised economies
Responding to the argument put forth by other experts that countries must diversify produce to increase trade volumes, she argues there is more room for businesses on the continent – and that energy must be channelled into industrialising the economies.
“I don’t think the issue, for me, is diversification. I think there is enough room for businesses on the continent. If we have all these exports of produce outside Africa, then the key thing is that these economies within Africa should be enhanced and industrialised sufficiently. Enough that between ourselves we are trading more and within the continent; we can significantly increase the amount of trade that we undertake,” she said.
