African businesses lose over $5 billion every year to charges, payments and other related costs to intra-African trade barriers. This is according to Mr. Mike Ogbalu, CEO Pan African Payment and Settlement System (PAPSS), Afreximbank at a meeting of the Nigerian American Chamber of Commerce (NACC) themed ‘1 year of AfCFTA (Opportunities, challenges and the Nigerian-American partnership)’ in Lagos.
In his statement he said, 80 per cent of payments destined for somewhere else on the continent, first of all have to travel somewhere else before getting to their final destination which is the reason why intra-African trade is still low at 15 to 18%.
“If payment still needs to fly half way around the world to somewhere else around the globe before coming back to the continent, then we are not going to support intra-African trade,” Ogbalu said
“Through PAPSS we have designed payments systems to be flexible; they can connect to national systems, to regional systems and can connect directly to commercial banks. It is built on a proven technology, it is in instant and in local currency,” he added.
PAPSS is a cross border central market infrastructure that supports settlement and enables payment transactions across Africa in a multilateral basis. However this settlement between the different countries is defined through a common framework across the continent.
“The hunger for third party global currencies is destroying African currencies. With PAPSS, a centralized infrastructure able to connect all the countries will guarantee instant payment and settlement transactions,” Ogbalu reiterated
“We have connected the Central Bank of Nigeria (CBN), Gambia, Guinea, Sierra Leone ,Ghana and today, live transactions are actually moving between those central banks,” he added.
Also speaking at the event, former Director General, Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Mr. John Isemede, commended the existence of Afreximbank’s PAPSS, but stated that, Nigeria lacks the structure to work with the platform. Saying agencies with no business background form majority of the parties that were set up to process the facilitation of AfCFTA which makes Nigeria fall back in terms of formulating trade policies.
