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The Pan-African Payment and Settlement System (PAPSS) operated by African Export-Import Bank (Afreximbank) in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat, announced today the signing of a Memorandum of Understanding (MoU) with BUNA, the cross-border and multi-currency payment system owned by the Arab Monetary Fund (AMF).
Interoperability among payment systems, as the foundation for enhancing cross-border payments, requires technical, process, and business system compatibility so that end users can seamlessly transact with each other across systems. This collaboration lays the foundation for the interoperability between PAPSS and BUNA payment systems, their participants will be able to make fast, secure, and affordable transactions in their local currencies between the African continent and the Arab region.
PAPSS is aggressively expanding its footprints across Africa with 8 central banks, 6 switches, and about 25 of the largest commercial banks on the continent. PAPSS has signed very significant strategic relationships with other key institutions.
By joining PAPSS, banks enable their customers to trade within Africa. Each bank joining PAPSS has access to tens of thousands of end-users already connected across the platform’s growing community of financial institutions. Central banks joining the PAPSS infrastructure extends the collective reach of the payment system to millions more, with the resultant positive impact on intra-African Trade.
The collaboration between PAPSS and Buna will further these benefits to the Buna network and vice versa. Together, we will create the foundational support for the innovation of trade and payment solutions which will significantly enhance the economy of both regions.
PAPSS also plans to collaborate with other regional and continental cross-border payments systems to extend its range beyond the African borders to support the growth of trade and investments with the African continent.
Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank and Chairperson of PAPSS Management Board, said:
“The MoU with BUNA is another important step that PAPSS has taken after its commercial launch. The Arab World and Africa have a long history of trade relations and the PAPSS-BUNA partnership will further facilitate the growth of trade between the two regions. The integration will provide banks across Africa and the Arab World with a seamless and one-stop center to help their clients transfer value to their counterparts in either region. As chairperson of the Arab-Africa Trade Bridges (AATB), I am very proud of this outcome and thank the Arab Monetary Fund, Badea and the Islamic Trade Finance Company (ITFC) for their strong partnership.”
Dr. Abdulrahman A. Al Hamidy, Director General Chairman of the Board of the Arab Monetary Fund, said:
“We highlight the important role of Afreximbank and the AMF in leading strategic initiatives that can strengthen the economic ties between the Arab region and the African continent and support the global efforts to promote financial inclusion and improve access to appropriate financial services. Buna’s success to establish interoperability with regional market infrastructure like PAPSS is another key milestone in Buna’s continuous efforts to expand its regional and global network and increase the value it brings to its participants.”
Mike Ogbalu III, CEO of PAPSS said:
PAPSS being Africa’s premier continent-wide payment rail specifically designed to transform trade on the continent is focused on the impact and not on short-term commercial benefits. PAPSS has been able to strike a balance between these objectives and ensuring that commercial value is not destroyed for its stakeholders. Sustaining this impact focus in its collaboration with Buna will have a dramatic impact on trade between Africa and the Arab world, and this is very exciting.
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About PAPSS: The Pan-African Payment and Settlement System – PAPSS is a centralized Financial Market Infrastructure that enables the efficient flow of money securely across African borders, minimizing risk and contributing to financial integration across the regions. PAPSS works in collaboration with Africa’s central banks to provide a payment and settlement service to which commercial banks and licensed payment service providers across the region can connect as ‘Participants’.
Afreximbank and the African Union (“AU”) launched the PAPSS at the Twelfth Extraordinary Summit of the African Union held on July 7, 2019, in Niamey, Niger Republic, therefore adopting PAPSS as a key instrument for the implementation of the African Continental Free Trade Agreement (AfCFTA). Further, in its thirteenth, (13th) extraordinary session, held on December 5, 2020, the assembly of African Union recommitted and instructed the Afreximbank and the AfCFTA secretariat to finalize among others, work on the Pan-African Payments and Settlements System (PAPSS). The 35th Ordinary Session of the Assembly of the AU further directed the AfCFTA and Afreximbank to deploy the system to cover the entire continent.