Central Bank of Nigeria Governor, Godwin Emefiele has described the newly launched Pan-African payment and settlement system (PAPSS) as a platform that will make cross-border transactions easier.
He added that the payment system will also reduce dollars, pounds and euros known as third currencies for transactions in Africa.
The CBN governor, at the launching of PAPSS on Thursday in Accra, Ghana, stated that the launched platform will improve West Africa’s means of transaction.
PAPSS was launched by Africa Export-Import Bank (Afreximbank), in partnership with African Union (AU) and African Continental Free Trade Area (AfCFTA).
The platform which is now available for commercial use was described as a milestone which will give fresh opportunity and aspiration for Africa.
Emefiele noted that CBN will ensure that financial institutions under it embrace PAPSS, while firmly recommending it to businesses in the country.
He further reiterated the Central Bank of Nigeria’s commitment to enhance the widespread adoption, acceptance and implementation of the platform.
According to Emefiele, the Pan-African payment and settlement system will benefit households, businesses, and financial institutions.
It will channel Africa towards growth and formalise transactions not captured in the official trade data.
“For example, businesses can be assured of an efficient and reliable payment gateway that supports the instant flow of funds and relatively the use of safe payment channels that usually comes at a high cost to households and businesses.
“The launch of PAPPS gives the fresh opportunity and aspiration for the African continent. It will simplify cross-border transactions, reduce third currencies for intra-African transactions and remove the need for correspondent Banks and ultimately amplify intra trade significantly.
“As a percentage of total trade, intra-African trade is expected to increase to 35% from 15% in five years with infrastructure provided by PAPSS as payments and settlements are resolved,” Emefiele stated.
Explaining the relevance of the new system, the CBN governor said settlements for intra Africa trade required a third currency and a non-African correspondent bank which had caused a loss of about $5 billion every year and lowered trade in African countries.
He lauded the newly introduced system put in place to curb further loss in the continent.
Emefiele stated that Nigeria is pleased by the features of PAPSS which made it participate actively in the programme for success to be achieved.
“With the growing pace of digitisation in financial services which has been accelerated from the onset of the COVID-19 pandemic, PAPSS can serve as a viable platform for supporting e-commerce in Africa,” CBN governor assured.
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