In a quiet but powerful shift, Africa is building the financial infrastructure to trade with itself—on its own terms. At the heart of this transformation is the Pan-African Payment and Settlement System (PAPSS), a groundbreaking initiative that’s redefining how money moves across the continent.
Launched in 2022 by Afreximbank in partnership with the African Union, PAPSS enables real-time cross-border payments in local currencies. It’s a cornerstone of the African Continental Free Trade Area (AfCFTA), which seeks to unify 54 countries into a single market for goods and services.
Cutting Costs, Boosting Trade
Before PAPSS, African businesses faced a costly and cumbersome process to send money across borders. Transactions were routed through foreign correspondent banks—often in Europe or the U.S.—and processed via the SWIFT network. The result? High fees, long delays, and a reliance on hard currencies like the U.S. dollar.
PAPSS changes that. By allowing direct payments between African countries in their own currencies, it eliminates intermediaries and slashes transaction costs. Experts estimate the system could save the continent over $5 billion annually—money that previously vanished into conversion fees and offshore routing.
Empowering SMEs and Strengthening Sovereignty
For small and medium enterprises (SMEs), PAPSS is a game-changer. It opens up cross-border trade opportunities that were once out of reach due to banking limitations and currency barriers. And by reducing dependence on foreign currencies, PAPSS enhances Africa’s financial sovereignty, shielding economies from external shocks.
The system is also designed for inclusivity. It’s interoperable with mobile money platforms and national payment switches, making it accessible to rural communities and unbanked populations. This digital reach is critical for building a truly pan-African financial ecosystem.
Who’s On Board?
As of mid-2025, PAPSS connects 16 African countries and over 150 commercial banks, supported by 15 financial institutions and 14 national payment switches. The countries currently live on the platform include:
West Africa: Nigeria, Ghana, Sierra Leone, Liberia, Guinea, The Gambia
North Africa: Egypt, Morocco, Algeria, Tunisia
East Africa: Kenya, Rwanda, Uganda
Southern Africa: Zambia, Zimbabwe, Malawi
While this is a strong start, the goal is full continental coverage. To get there, experts say targeted policy reforms are essential.
What Needs to Change?
To scale PAPSS across all 54 African Union member states, stakeholders are calling for:
Regulatory Harmonisation: Align payment laws across regional blocs to ease onboarding for banks and fintechs.
Digital Infrastructure Investment: Expand broadband and upgrade systems in underserved areas to support participation.
Currency Transparency: Develop clear exchange rate mechanisms and explore regional stabilisation tools to build trust.
Cybersecurity Standards: Implement continent-wide protocols for fraud detection and data protection.
Private Sector Incentives: Offer tax breaks and reduced fees to encourage adoption, especially among SMEs.
Public Awareness Campaigns: Educate businesses and consumers about PAPSS benefits to drive usage and confidence.
A Continental Vision
PAPSS is more than a payment platform—it’s a strategic lever for economic transformation. By reducing costs, enabling trade, and fostering financial independence, it lays the foundation for a unified African market.
If supported by smart policy and bold leadership, PAPSS could become the default infrastructure for African commerce—empowering every country, bank, and citizen to transact seamlessly across borders.
Source: With additional information from African Report, MEF, Wikipedia, PACCI, JSTOR, and Matta Blog
