Digital payment system on the continent scale officially launched

Ho, July 25, GNA – The Pan-African Payment
and Settlement System (PAPSS) was officially launched by the African Council
Export-Import Bank (Afreximbank) at the Extraordinary Summit of the African Union,
which ended recently in Niamey, Republic of Niger.

The PAPSS becomes a continent
digital system to facilitate payments and payments of goods and services in
local currencies.

The summit brought together African heads of state
begins the operational phase of the African Continental Free Trade Area
(AfCFTA).

Professor Benoît Oramah, President of
Afreximbank at the launch said "the PAPSS is a platform that will
domesticate intra-regional payments, save the continent more than $ 5 billion
payment of transaction costs per year, formalize a significant proportion of
informal intra-African trade estimated at $ 50 billion and, most importantly, contributes to
boost intra-African trade ".

"PAPSS is intended to facilitate payments
in local currency … If a Nigerian wants to buy products from Ghana, the Nigerian
will pay for the goods in Naira, while the Ghanaian supplier will be paid in
Ghanaian Cedis. "

The platform, which was developed in
collaboration with the African Union, will enable African countries
companies to clear and settle intra-African trade transactions in their country
currencies. This will greatly reduce the reliance on hard currencies in
regional commercial payments.

Today, cross-border payments in Africa
usually involves a third currency, such as the US dollar or the euro,
high costs and long transaction times.

From the above, this does not mean that the
the deficit between two countries will be settled in dollars.

Afreximbank has already worked with the
The West African Monetary Institute (WAMI) will test the PAPSS solution in six
African countries.

The PAPSS is therefore a crucial element of
African Union action for the implementation of AfCFTA, which was signed by 54
55 countries of the African Union and ratified by 27 countries.

Nigeria and Benin were the last countries
sign the historic trade agreement earlier in July, leaving Eritrea to
only country that resists.

For example, in order to liberalize 90
percent of trade between Member States, nations are still
identify sectors to be protected and liberalized, a process that
would probably be long and prolonged.

Afreximbank plays a crucial role in
AfCFTA's ambition to create an African single market for goods and services
covering 1.2 billion people.

In addition to the PAPSS, the bank is
establishing an adjustment facility of US $ 1 billion to enable countries to
to adjust in an orderly fashion to sudden and significant losses of tariff revenue "
result of the implementation of the agreement, said the bank.

While the operational phase of AfCFTA has
At present, a number of outstanding decisions are still pending.
pending by participating nations, including tariffs and rules of origin.

"Governments want to build their reserves,
they therefore tend to prefer exports to markets that issue hard currencies. For that
reason, a significant amount of cross-border trade takes place informally ", Prof.
Said Oramah.

The question is made worse by the fact that
most merchants currently do not have a system allowing them to settle in a
secure way.

President Oramah acknowledges however that he
may not be possible to completely eliminate hard currency in the trade
regulations and believes that, through the platform, it would be clearly
reduced.

AfCFTA is the largest free trade agreement in the world.
number of member countries with about 1.2 billion people and $ 3.4 billion
trillion of gross domestic product (GDP) combined.

Alan Kyerematen, Minister of Trade and Industry
The industry has revealed that Ghana could take advantage of AfCFTA in various
trade facilitation, customs management reforms in addition to
Single Points and Implementation of WTO Trade Facilitation
agreement.

He said stimulus package for the locals
industries would include, EximBank support, Venture Capital Trust Fund, Ghana
Infrastructure, Finance and Technology Investment Fund (Fintech) and Banking Sector
reforms, which are among the means to access funding to strengthen the agreement.

He stated that, as part of the trade information, Ghana
Trade, Electronic Commerce Information (GEPA) and trade fairs and
the exhibitions would be used.

Under trade-related infrastructure, he said
roads, port expansion projects, airports and railways hold the spotlight
provide connectivity links.

Mr Kyerematen said strengthening industrial capacities
production capacity, 1D1F initiative, strategic anchoring industries
initiatives, One-One-One Park (industrial parks and special economic zones),
The development of SMEs and the promotion of standards are one of the badets to lead
l & # 39; AfCFTA.

The dream of the pacesetters of
Pan-Africanism has taken a leap forward and connoisseurs are predicting the success of
AfCFTA could surpbad the challenges of implementation.

GNA