These significant partnerships aim to revolutionise the settlement of cross-border transactions across Africa, leveraging on the vast network of subsidiaries and representative offices across major economic centres across Africa.
These MOUs were signed on Monday, 19 June 2023, at the opening ceremony of Afreximbank’s 30th Anniversary Celebrations and 30th Annual Meetings held in Accra, Ghana, in the presence of Heads of State and Prime Ministers from Africa and the Caribbean, Heads of continental policy and governance institutions as well as international institutions.
The signature of these Memorandums signifies a monumental step forward in the pursuit of seamless cross-border trade payments throughout the almost 40 countries covered by these Banks. The broad collaboration between PAPSS and African commercial banks will pave the way for enhanced efficiency, transparency, and reliability in intra-African settlement. The adoption of PAPSS's cutting-edge settlement model will streamline operations and empower businesses by providing a secure and technologically advanced platform for cross-border transactions.
As part of this partnership, Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group, and UBA Group will collaborate closely with PAPSS to ensure seamless integration of PAPSS into their existing systems. This collaborative effort will include opening up all their African footprints for PAPSS, facilitating settlement of transactions, encouraging the participation of Fintech in PAPSS via the banks and expanding PAPSS to all the banks’ current digital channels such as mobile app banking and e-banking.
Commenting on the signing, Professor Benedict Oramah, President of Afreximbank, said: “the signature of these MoUs marks a remarkable step towards the realisation of the aspirations of Africa’s foreleaders, who envisioned the creation of a payment and clearing union about six decades ago. It also draws us closer to domesticating cross-border payments by enabling payments for cross-border trade in African currencies while strengthening African currencies. By leveraging on the vast continental coverage of these African commercial banks, PAPSS will seamlessly facilitate cross-border trade and payments and boost intra-African trade and investments”.
Also commenting on the signing, H.E. Wamkele Mene, Secretary General of the AfCFTA, said: “the introduction of the new PAPSS Model for onboarding African Commercial Banks and the signing of the MoUs with the five African Commercial Bank Groups signifies a bold step towards the full operationalisation of PAPSS for the benefit of African traders and SMEs in the implementation of the AfCFTA Agreement.”
The Chief Executive Officer of PAPSS, Mr Mike Ogbalu III, expressed enthusiasm about these collaborations, stating that "these partnerships with Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group, and UBA Group mark a significant milestone in the journey toward a more integrated and efficient African banking landscape. By embracing PAPSS’ Commercial Bank Settlement Model, these banks are helping build a robust continental platform for fostering cross-border payments, thereby paving the way for financial inclusion and substantial continental economic development.”
These MOUs will be put into effect gradually in partnership with central banks in the countries where the 5 Group Banks operate. Customers of the banks in Africa will be informed through the usual channels of communication as soon as the service becomes available in their countries. PAPSS and the banks will be working towards making this service available towards year-end.
The Pan-African Payment and Settlement System – PAPSS is a centralised Financial Market Infrastructure that enables the efficient flow of money securely across African borders, minimising risk and contributing to financial integration across the regions. PAPSS works in collaboration with Africa’s central banks to provide a payment and settlement service to which commercial banks and licensed payment service providers across the region can connect as ‘Participants’. Afreximbank and the African Union (“AU”) first announced PAPSS at the Twelfth Extraordinary Summit of the African Union held on July 7, 2019, in Niamey, Niger Republic, therefore adopting PAPSS as a key instrument for the implementation of the African Continental Free Trade Agreement (AfCFTA). Further, in its thirteenth (13th) extraordinary session, held on December 5, 2020, the assembly of the African Union recommitted and instructed the Afreximbank and the AfCFTA secretariat to finalise, among others, work on the Pan-African Payments and Settlements System (PAPSS). The 35th Ordinary Session of the Assembly of the AU further directed the AfCFTA and Afreximbank to deploy the system to cover the entire continent. PAPSS was officially launched in Accra, Ghana, on January 13, 2022, thus making it available for use by the public.