PAPSS to Launch African Currency Marketplace, Boosting Intra-Continental Trade
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The Pan-African Payments and Settlement System (PAPSS) is set to introduce a new African currency marketplace later this year, aiming to revolutionize cross-border trade and financial integration across the continent.
With the backing of 15 central banks and integration with 150 commercial banks, PAPSS is addressing Africa’s persistent liquidity and currency exchange challenges by enabling direct trading between local currencies. This initiative eliminates the reliance on third-party currencies like the U.S. dollar, reducing costs and improving efficiency for businesses and individuals.
Transforming Currency Exchange in Africa
Historically, Africa’s foreign exchange market has been dominated by a few key players, with South Africa and Nigeria handling the bulk of trading. Many businesses are forced to convert local currencies into dollars before making intra-African transactions, resulting in high costs and inefficiencies.
The new PAPSS marketplace matches buyers and sellers of different African currencies, allowing for seamless transactions. For instance, an Ethiopian airline earning revenue in Nigerian naira can directly exchange its funds with a Nigerian company needing Ethiopian birr, eliminating the need for dollar conversions.
“The system will intelligently pair businesses needing different African currencies, ensuring smooth transactions without third-party interference,” said Mike Ogbalu, CEO of PAPSS.
A Step Toward Economic Integration
The move comes as several African nations, including Nigeria, Egypt, and Ethiopia, transition to more market-driven exchange rate systems. However, currency volatility, economic instability, and dollar shortages remain challenges in regions like South Sudan and the Central African Republic.
For businesses operating in such environments, currency revaluation losses and difficulties in repatriating revenue are ongoing concerns. Some firms have resorted to cryptocurrency solutions like Bitcoin, though adoption is limited due to regulatory uncertainties in countries like Kenya.
Ogbalu describes the PAPSS currency marketplace as “transformational”, offering a long-awaited solution to currency conversion struggles that have hindered African trade. By providing direct currency exchange options, the platform is expected to enhance liquidity, reduce forex risks, and unlock new opportunities for businesses seeking to expand across Africa.
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