The Bank of Ghana (BoG) has reiterated its strong commitment to the Pan-African Payment and Settlement System (PAPSS), a centralised platform designed to revolutionise cross-border trade across the continent.
Speaking at the Afreximbank Annual Shareholders Meeting in Abuja, Nigeria, the Second Deputy Governor of BoG, Mrs. Matilda Asante Asiedu, outlined the strategic benefits PAPSS holds for Ghana’s economy, especially in reducing the burden of currency conversions and improving foreign exchange reserves.
“For us in Ghana, PAPSS is very active. We believe in the infrastructure and its impact on financial intermediation,” Mrs. Asiedu affirmed during the high-level gathering of African central bankers and financial leaders.
The system, spearheaded by Afreximbank, enables secure, instant, and low-cost transactions between African countries without the need to route payments through international correspondent banks.
Reducing the Cost of Cross-Border Transactions
One of the most significant advantages of PAPSS is its ability to cut costs associated with cross-border trade. Traditionally, businesses and banks in Africa have had to rely on intermediary currencies such as the US dollar or the euro to settle transactions between countries, incurring high conversion fees and delays.
“With PAPSS, we can now trade in local currencies, removing multiple layers of fees and time-consuming processes,” Mrs. Asiedu explained. “This is key to unlocking the trade potential of Ghanaian enterprises.”
As more countries sign up to the platform, she noted, the collective impact will further reduce transaction costs for Ghanaian exporters and importers.
“We are happy that more countries are coming on board. This expansion will make it even cheaper and faster for our businesses to trade across the continent.”
Mrs. Matilda Asante Asiedu
Supporting Ghana’s Balance of Payments and Reserve Management
Beyond lowering transaction costs, PAPSS offers Ghana important benefits for managing its balance of payments and strengthening the Bank’s reserves. The system eliminates reliance on third-party currencies and helps conserve foreign exchange, which is critical for maintaining macroeconomic stability.
“This platform is a valuable tool in supporting our balance of payments,” Mrs. Asiedu observed. “It enables us to reduce outflows of hard currency and supports our efforts to build and manage reserves more effectively.”
This efficiency aligns with the Bank’s broader objectives of safeguarding financial stability and bolstering confidence in the Ghanaian cedi.
Ghana has been among the pioneers of PAPSS adoption. According to Mrs. Asiedu, the country was part of the first group of central banks to sign on to the system, demonstrating a proactive approach to regional financial integration.
“Our experience has shown that collaboration is essential,” she stated. “We are proud to be part of this collective effort to deepen economic ties among African nations.”
During the Abuja meeting, several central bank governors expressed interest in Ghana’s success story and the regulatory framework BoG has put in place to oversee the digital payments ecosystem.
“We’re open to collaboration and knowledge-sharing,” Mrs. Asiedu emphasized. “That’s how we all grow.”
Mrs. Asiedu also highlighted BoG’s broader commitment to modernising payment systems and adopting innovative regulatory practices.
“We are working hard to catch up with global trends in digital banking and payment systems. It’s about effective regulation, and that means embracing innovative solutions that can help us regulate smarter.”
Mrs. Matilda Asante Asiedu
This approach includes strengthening domestic infrastructure, promoting interoperability between banks and fintech companies, and investing in cybersecurity capabilities to protect the financial system. “We believe that modern payment systems can support financial inclusion and economic growth,” she added.
The successful expansion of PAPSS promises to usher in a new era of trade and financial integration across Africa. For Ghana, the system offers a pathway to more resilient reserves, reduced currency volatility, and increased competitiveness for local businesses. “With PAPSS, we are laying the foundation for a stronger, more self-reliant African economy,” Mrs. Asiedu concluded.
