PAPSS — cross-border payments through the AfCFTA settlement layer

<p>The Pan-African Payment and Settlement System (PAPSS) launched operationally in January 2022 under the African Export-Import Bank (Afreximbank) as the settlement layer for the AfCFTA. PAPSS is designed to allow intra-African cross-border payments to settle directly between commercial banks in local currencies, eliminating the dependency on correspondent-bank dollar-clearing (typically through New York or London) that has historically routed African intra-continental payments through international financial centres.</p> <p>The technical architecture is a multilateral net-settlement system. A Nigerian bank making a payment to a Ghanaian bank submits the transaction to PAPSS; PAPSS clears it bilaterally in NGN/GHS; the multilateral net positions are settled in a basket of African currencies plus a smaller residual USD position. The system reduces the dollar-clearing requirement for intra-African trade from approximately 80% (the pre-PAPSS baseline per the African Union 2021 estimates) to a substantially lower target.</p> <p>Three years into operations, the adoption is uneven. The system has live participants from approximately 50 commercial banks across 15+ African countries; cumulative transaction volume through end-2024 was approximately USD 1.2 billion. The volume is real but small relative to total intra-African trade (estimated USD 200+ billion annually). The major participating central banks are CBN (Nigeria), Bank of Ghana, Central Bank of Kenya, Bank of Mauritius, Reserve Bank of Zimbabwe, the Central Bank of West African States (BCEAO covering eight francophone West African countries), and the Central Bank of Egypt. Notable absences: South African Reserve Bank, Bank Al-Maghrib (Morocco), and the Tunisian central bank.</p> <p>Mike Ogbalu (PAPSS CEO, formerly of Interswitch), Benedict Oramah (Afreximbank President), and the African Continental Free Trade Area Secretariat under Wamkele Mene have built the political coalition for PAPSS expansion. The structural challenge is that PAPSS-enabled intra-African trade-finance products (the export-import trade letters of credit, the supply-chain finance instruments) require correspondent-banking relationships between the PAPSS-participating banks; building those relationships from the historical post-independence pattern of bilateral African-to-European correspondent links is a multi-year project.</p> <p>The geopolitical context matters. The 2022 US/EU SWIFT-related sanctions on Russian banks made every non-Western central bank more interested in payment-settlement alternatives. PAPSS&#x27;s African intra-continental positioning is now read in the context of the BRICS+ payment-settlement discussions, the Chinese CIPS expansion, and the broader fragmentation of the post-Bretton-Woods settlement architecture. African policy debate has, prudently, kept PAPSS framing focused on intra-African trade rather than on broader geopolitical alignment — the system needs to function as African trade infrastructure before it can be positioned as anything more ambitious. The next two years&#x27; transaction-volume growth and South African / Maghrebine accession will indicate the trajectory.</p>