The African Export-Import Bank (Afreximbank) reveals that the Pan-African Payments and Settlements System (PAPSS) will be operational in June 2021.
Also, the piloting of the system commences in April. This follows Afreximbank and African Continental Free Trade Area (AfCFTA) Secretariat’s call on President Nana Akufo-Addo.
In a statement, Afreximbank reveals that as the Champion of the African Union Financial Institutions, this demands a courtesy call to H.E. Nana Akufo-Addo to brief him on the progress of PAPSS. Also, Afreximbank went on to give updates on transactions it funds in Ghana.
Updates on PAPSS
The President of Afreximbank, Prof. Benedict Oramah said his outfit is through with the approval of US$500 million to support the clearing and settlement for PAPSS. More so, this amount is to ensure the piloting of PAPSS in the West African Monetary Zone (WAMZ) countries. Also, to support the system upon full continent-wide implementation, he envisages that this requires an amount of US$3 billion.
“On behalf of the Board of Afreximbank, I thank and commend His Excellency Nana Akufo-Addo for endorsing PAPSS as a critical instrument for full AfCFTA implementation and boosting intra-regional trade.
“PAPSS will be rolled out across the continent to facilitate trade, removing major constraints to Africa’s regional payment systems.
“We count on President Akufo-Addo’s continuous strong support for integration to the BCEAO, once integration with the central banks in the WAMZ region is completed, thereby achieving full ECOWAS integration”.
Prof. Oramah
Furthermore, the Afreximbank President discloses that his outfit is already discussing with other countries and regional payment systems for connection to the system post pilot phase. This includes COMESA REPSS, Zimbabwe and Angola.
Updates on FEDA and AfCFTA Adjustment Facility
In addition, there were updates on the Fund for Export Development Africa (FEDA) from Prof. Oramah to President Akufo-Addo. Also, FEDA is a private equity investment entity. Primarily, its objective is to facilitate Foreign Direct Investment (FDI) flows into Africa’s trade and export sectors.
Moreover, Prof. Oramah hints that Afreximbank is supporting the African Union and the AfCFTA Secretariat to develop the AfCFTA Adjustment Facility. Currently, the Board of Afreximbank has already made an approval to the tune of US$1 billion for the Bank’s participation.
Among other things, the Facility will cushion African Governments from the AfCFTA-induced tariff revenue loss. Also, it will allow countries to make smooth adjustments to the AfCFTA.
More importantly, it will provide medium term financing for countries as well as the private sector. This will help them to build efficient trade facilitating infrastructure, expand and retool their productive capabilities. Also, they can retrain and develop needed skills to drive the expected industrialisation to effectively boost intra-African trade AfCFTA.
Finally, He went on to entreat H.E. Nana Akufo-Addo and Ghana’s participation. Additionally, this is towards supporting the African Union’s (AU) effort for increasing the capitalization of Afreximbank.
President Akufo-Addo’s response
Commending the Afreximbank, President Akufo-Addo said they have done well for advancing the course of developing the African continent. Additionally, this he said has been mainly through Trade and Industrialisation.
On PAPSS, he said it promises to be effective in terms of its ability to facilitate trade and investment in the ECOWAS region. In addition, he remarks how good it is to hear that the pilot project is on course. Furthermore, he stated that the role of Afreximbank as the enabler of intra-Africa trade for the development of the continent is exceptional and needs support from all.
