Imagine a trader in Lagos selling goods to a buyer in Dakar, and the payment gets settled in seconds, no need to convert to dollars, no long wait, no steep transaction fees. This is not an imagination. This is the promise of the Pan-African Payment and Settlement System (PAPSS), one of the most transformational developments in Africa’s trade landscape in recent years.
Launched under the leadership of Afreximbank in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS is not just another fintech solution. It is the bold infrastructural backbone of a borderless Africa, particularly in terms of money movement.
PAPSS can be described as a Pan-African real-time gross settlement (RTGS) infrastructure for cross-border payments in distinct local currencies. It was publicly launched on January 13, 2022 by the African Union (AU) and the African Export-Import Bank (Afreximbank) to compliment trading under the African Continental Free Trade Area (AfCFTA) with further planned rollout in the Caribbean region by end of 2024.
The State Parties of the AfCFTA and interested stakeholders understand that the lifeblood of trade is payments. If payments and the infrastructure that supports them are not present, then there is no trade. Consequently, in line with the objectives of the Agreement, the African Export-Import Bank (Afreximbank), some Central Banks of State Parties of the AfCFTA, the African Union (AU), and the Secretariat of the AfCFTA, launched the Pan African Payment and Settlement System (“PAPSS”).
What makes PAPSS a Big Deal
For decades, African countries have traded with the rest of the world more than with each other. One of the biggest culprits was payment bottlenecks. A Malian importer buying goods from Kenya, for instance, would often have to route the payment through U.S. or European correspondent banks, incurring high costs, long delays, and foreign exchange risks. This isabsurd for a continent so rich in people, talent, and resources.
As of 2022, trade between African countries accounted for only about 15% of total African trade, compared to over 60% in Europe and 50% in Asia. This statistic reveals a continent trading more with the rest of the world than with itself.
Dare Okoudjou, Founder and CEO of Onafriq, speaking about the challenges facing intra-African trade, and the importance of payment systems like PAPSS stated as follows:
At Onafriq, we have always believed that Africans are not limited by borders and that their money should not be either. The interchangeability of African currencies is still very limited after decades of independence, meaning that intra-Africa trade too often relies on hard currencies, hampering the growth of intra-African trade and our continent’s economies. By making cross-border payments affordable and easier, PAPSS gives Small and Medium-sized Enterprises (SMEs), entrepreneurs, and traders easier access to the formal payments services that will help them grow their businesses.
How PAPSS changes all that.
PAPSS allows for real-time, cross-border payments in local African currencies. A Nigerian can now pay a Ghanaian supplier in Naira, and the supplier receives cedis instantly. This reduces reliance on hard currencies like the Dollar or Euro, cuts transaction costs by as much as 30%, and improves liquidity and confidence within the African market.
“We are proud to support a system built by Africa for Africa. This is about sovereignty, innovation, and building trust in African systems to shape the continent’s financial future. The PAPSS Card will become Africa’s most trusted payments brand, strengthening the backbone of the continent’s financial future,” Muzaffer Khokhar, Executive Chairman of Mercury, said at the launch.
According to the Secretary-General of the AfCFTA, PAPSS will enable Africa reduce reliance on third currencies, and it has the potential to significantly boost intra-Africa trade.
On 3rd March, 2023, The Nigerian Exchange Limited (NGX) and Ghanian Stock Exchange (GSE) successfully completed the first PAPSS client transaction between two West African countries. The trade which was the first of its kind, was executed by Chapel Hill Denham Securities Ghana Limited (CHDG) and Chapel Hill Denham Securities Limited (CHDS). The historic payment was from CHDG through Stanbic IBTC Capital Limited via PAPSS, for the purpose of equity trading in the Nigerian Exchange Limited. The fund was received in Nigeria by the CHDS in Naira and used in the purchase of shares as requested by CHD Ghana.
Following the above flagship transaction, the system has expanded. And notable transactions include those between Nigeria and other participating countries like Sierra Leone, Liberia, Gambia, and Guinea.
PAPSS has expanded beyond the initial West African Monetary Zone (WAMZ) countries (Nigeria, Ghana, Gambia, Sierra Leone, Liberia, and Guinea) to include other African nations like Djibouti, Kenya, Rwanda, Zambia, and Zimbabwe.
How PAPSS works
In order to enable instant payments across African borders in local currency, PAPSS supports three core processes: instant payment, pre-funding and net settlement.
With Instant payment, participants no longer need to convert local currencies into hard currencies which then entailed the funds leaving Africa to be converted before being sent back again to the beneficiary bank, adding days to the transaction time. In addition, compliance, legal and sanctions checks are performed instantly within the system.
Here is how it works:
1. An originator issues a payment instruction in their local currency to their bank or payment service provider.
2. The payment instruction is sent to PAPSS.
3. PAPSS carries out all necessary validation checks on the payment instruction.
4. The beneficiary’s bank clears the funds to the beneficiary in their local currency.
Boosting Intra-African Trade and Africa’s Economic Standing
At the heart of PAPSS is a great ambition: to fuel the growth of intra-African trade. With the AfCFTA aiming to create the largest free trade area in the world bringing together 55 countries with a combined GDP of over $3 trillion, PAPSS plays a critical role as the financial engine.
The System would replace the current corresponding banking for intra-African trade, especially for large value cross-border payments. Expectedly, its roll-out and full implementation should herald the introduction of a single currency for the African Free Trade Area and the evolution of an African Central Bank.
PAPSS unlocks the following:
Trade Facilitation: By simplifying cross-border transactions, PAPSS reduces trade friction for businesses of all sizes, from informal traders to established corporations.
SME Empowerment: Small businesses, often priced out of international trade due to payment barriers, now have an entry point to sell and buy across African borders.
Foreign Exchange Savings: African central banks can conserve scarce foreign reserves previously used for intra-African trade payments.
Regional Value Chains: PAPSS encourages countries to source raw materials and intermediate goods from each other, fostering industrial integration.
Economic Sovereignty: Reducing dependence on external currencies gives Africa more control over its own economic systems.
The system also supports currency sovereignty, reducing Africa’s collective dependence on the US dollar, euro, and other foreign currencies. This is an important step toward reclaiming Africa’s financial independence. By increasing the utility of African currencies and encouraging their use in regional trade, PAPSS helps restore trust in local economies while minimizing exposure to external shocks.
Global Context: How PAPSS Compares
PAPSS is not the first regional payment system of its kind. Across the world, jurisdictions have created mechanisms to simplify cross-border transactions. What makes PAPSS notable is that it draws lessons from these systems while being uniquely tailored to Africa’s realities.
In the European Union, the Single Euro Payments Area (SEPA) and TARGET2 have allowed seamless euro-denominated transfers across member states, which was important for the functioning of the EU’s single market. This system was built upon deep economic and political integration, a model that PAPSS is gradually helping Africa to emulate, even without a single currency.
In Southeast Asia, the ASEAN Payment Connectivity initiative is linking national payment infrastructures to enable real-time, QR-based transactions across countries like Indonesia, Singapore, Malaysia, and Thailand.
PAPSS stands out for its continental ambition, multi-currency capacity, and its close alignment with the AfCFTA’s broader trade liberalization agenda. While global systems may have the benefit of stronger institutions or shared currencies, PAPSS reflects a bold move to build integration through infrastructure, not wait for it.
Who’s on Board?
As of mid-2025, PAPSS is live in all six African regions, with pilot implementation completed in the West African Monetary Zone (WAMZ). Countries like Nigeria, Ghana, Liberia, Guinea, Sierra Leone, and The Gambia are actively participating.
More than 10 central banks, and several payment service providers are connected to the PAPSS platform, with ongoing onboarding across other regions like East and Southern Africa.
Speaking on the journey so far for PAPSS at the Afreximbank Annual Meeting (AAM 2025) in Abuja, Nigeria, Mr. Mike Ogbalu, (CEO, PAPSS) revealed that, “PAPSS has expanded to 16 countries, with 15 financial institutions and 14 switches connected across Africa and is growing rapidly. “We’re beginning to see meaningful scaling and adoption of PAPSS capabilities across digital channels, which is accelerating our impact.”
In a recent circular referenced TED/FEM/PUB/FPC/001/006 issued on April 28, 2025, the Central Bank of Nigeria outlined the key changes to the documentation requirements associated with PAPSS transactions. The following key changes take effect immediately:
Simplified Documentation for Low-Value Transactions: Customers may now use basic KYC and AML documents provided to their Authorized Dealer Banks (ADBs) for low-value transactions (US$2,000 and US$5,000 equivalent in Naira for Individuals and corporate, respectively). For transactions above the thresholds, all documentation as stipulated in the CBN Foreign Exchange Manual and related circulars remains mandatory.
Responsibility of Applicants: Applicants are responsible for ensuring all regulatory documents are available to facilitate the clearance of goods, as required by relevant government agencies.
Foreign Exchange Sourcing: Authorized Dealer Banks may now source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market (without recourse to the CBN).
Export Proceeds: All export proceeds repatriated via PAPSS shall be certified by the relevant processing banks.
The Central Bank of Nigeria urges all banks to adopt PAPSS and commence originating transactions in line with this new policy. In addition, CBN encourages exporters, importers, and individuals to familiarize themselves with the new requirements and leverage PAPSS for cross-border transactions within Africa.
The Brain Behind the Bold Move
Afreximbank deserves commendation for not just conceptualizing PAPSS but also for funding its rollout and underwriting settlement risks. Equally vital are the efforts of the AfCFTA Secretariat, African Union Commission, and national regulators who have supported this vision with political will and policy frameworks.
This level of collaboration across governments, banks, and regional economic communities is a rare but welcome sight in Africa’s integration story.
Opportunities for Lawyers and Trade Experts
PAPSS isn’t just a technical revolution; it’s also opening up fresh frontiers in trade law, fintech regulation, and cross-border legal advisory.
For lawyers and trade professionals:
Contract Design: More businesses will need help drafting cross-border agreements that align with new payment realities.
Regulatory Compliance: Navigating the legal terrain of multi-country financial operations calls for sharp legal minds.
Dispute Resolution: As intra-African trade grows, so will the need for arbitration, mediation, and litigation support.
Policy Development: Legal experts are needed to shape rules that ensure transparency, interoperability, and fair competition in this emerging payment ecosystem.
The Challenges Ahead
Like any bold initiative, PAPSS has its hurdles:
• Harmonizing Regulations: Different countries have different banking and currency policies, which can slow full integration.
• Cybersecurity Risks: A real-time pan-African network must prioritize robust security measures to prevent fraud and data breaches.
• Awareness and Adoption: Many businesses are still unaware of PAPSS, or uncertain how to integrate it into their operations.
These challenges are real, but they’re not insurmountable. They require sustained political commitment, private sector involvement, and continuous education of stakeholders.
A Joyful Step Toward Africa’s Economic Independence
As Africa continues its quest for prosperity and excellence, systems like PAPSS must not only be supported, they must be protected, and celebrated. It is through tools like this that African entrepreneurs will rise, free markets will flourish, and the dream of a truly connected, economically vibrant continent will come to life.
Africa has long talked about unity, trade, and prosperity. PAPSS is proof that those dreams are being translated into action. With every seamless transaction processed through PAPSS, Africa edges closer to becoming a self-reliant economic powerhouse, capable of competing globally not as fragmented states, but as one collective market.
Kudos again to Afreximbank, the AfCFTA Secretariat, the African Union, and all financial institutions who continue to push the PAPSS dream forward.
The future is bright. The trade is faster. The payments are ours. PAPSS: Africa’s Answer to Seamless Intra-African Payments?
Chinza Egwuatu, Esq.
Maritime Lawyer | Trade Advocate | Africa Enthusiast|
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