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African countries urged to sign Payment and Settlement System

Delays in signing the Pan-African Payment and Settlement System is affecting intra-africa trade.

Cooperatives Cabinet Secretary Simon Chelugui told the just concluded third Kenya International Investment Conference that only 28 commercial banks and eight central banks in Africa have adopted the payment platform which is meant to ease finacial settlements in Africa.

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Chelugui has urged Africsn central bankers to expedite the signing and adoption process.

In January last year, the Africa export- import bank and the Africa Continental free trade area rolled out the Pan-African Payment and Settlement System in a bid to allow African countries trade with each other, without involving other currencies like the US dollar or the Euro.

The continent has 46 currencies which have minimal acceptance on the continent.

Cooperatives CS urged African Countries to on board onto the PAPSS to complement trading under the AfCFTA.

If fully adopted, the system will save African countries over five billion dollars in currency exchange costs.

Chelagui notes PAPSS operationalization will minimize risk and provide an alternative to current high-cost and lengthy correspondent banking relationships to facilitate trade and other economic activities among African countries.

By June, the network consisted of 8 central banks, 28 commercial banks and six switches and hopes to expand into the five regions of Africa before the end of 2023.

All Central banks are to sign up by the end of 2024 and all commercial banks by the end of 2025.

African states have been urged to fastrack signing of the Pan-African Payment and Settlement System where all Central banks are to sign up by the end of 2024 and all commercial banks by the end of 2025, a centralized Financial Market Infrastructure enabling the efficient and secure flow of money across African borders.

Cooperatives Cabinet Secretary Simon Chelagui says this will ease overreliance on the dollar for transactions across the continent thus boost Intra- Africa trade.

A seemingly disintegrated financial market system across Africa has for eons dogged crossborder trade by driving costs of exports and imports and creating an overreliance on the dollar for transatctions.

During the 3rd and last day of the Kenya international investment conference member states were urged to on board onto the Pan-African Payment and Settlement System – an African Union infrastructure developed in collaboration with the African Export-Import Bank (Afreximbank) to complement trading under the AfCFTA.

Cooperatives Cabinet secretary Simon Chelagui noted PAPSS operationalization will minimize risk and provide an alternative to current high-cost and lengthy correspondent banking relationships to facilitate trade and other economic activities among African countries.

By June network consisted of 8 central banks, 28 commercial banks and six switches and hopes to expand into the five regions of Africa before the end of 2023.

All Central banks are to sign up by the end of 2024 and all commercial banks by the end of 2025.

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