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PAPSS, developed by African Export-Import Bank (Afreximbank) in collaboration with the African Union and the AfCFTA Secretariat, facilitates real-time settlement of intra-African trade and payments, in African currencies, across the continent. By uniting central banks from across Africa, PAPSS seeks to address the existing challenges faced by African businesses and individuals in accessing efficient and cost-effective cross-border payment services.
Banque Centrale de Tunisie’s membership in PAPSS signifies the bank’s determination to foster economic growth and development within the country and the African region. This value-adding collaboration will allow Tunisian businesses and citizens to benefit from enhanced payment efficiency, reduced transaction costs, and more opportunities to trade and pay with other African countries.
Commenting on this landmark achievement, H.E Mr. Marouane El Abassi, Governor of Banque Centrale de Tunisie said that the inclusion of BCT in the PAPSS system demonstrates the country’s commitment to regional integration within the African continent at an economic and financial level. He further stated that this initiative supports the Government’s efforts, led by the Ministry of Commerce, to integrate Tunisia into the AfCFTA. In 2022, BCT also joined the inter-Arab payment and settlement System (BUNA), in continuation of its commitment to the country’s strategic priorities.
Additionally, Mr. El Abassi called upon banks and the Post Office to join this efficient and cost-effective alternative mechanism to better support Tunisian economic operators in their transactions across the African continent. He emphasized the importance of opening new commercial opportunities with Africa and expanding Tunisia’s presence in this promising market.
Also commenting on the signing, Mrs. Ben Rejeb, Minister of Trade & Export Development emphasized the significance of joining a platform that can facilitate integration into the formal sector, enhance intra-African exports, and reduce transaction costs and processing times.
“We are delighted to welcome Banque Centrale de Tunisie into the PAPSS network as the first central bank to join the system in the North Africa region” said Dr. George Elombi, Executive Vice President of Afreximbank. “As the Pan-African Payment and Settlement System (PAPSS) continues to attract more countries, we are witnessing a growing belief among Africans in their own abilities and potential to drive the development of the continent through their own initiatives. At Afreximbank, we have unwavering confidence that PAPSS will revolutionize the payment landscape within Africa, ultimately benefiting our people. We extend our heartfelt gratitude to Banque Centrale de Tunisie for their trust and decision to join the PAPSS network, as it signifies a significant step towards achieving our shared goals.”
The Chief Executive Officer of PAPSS Mr. Mike Ogbalu III. echoed Dr. Elombi’s sentiments, emphasizing the significance of Banque Centrale de Tunisie joining PAPSS. “We are thrilled to welcome Banque Centrale de Tunisie as our thirteenth member and first Central Bank in North Africa. Their inclusion highlights the growing recognition of PAPSS’s transformative role in simplifying cross-border payments on the continent. As PAPSS continues to expand its membership base, we are encouraged by the commitment of central banks in facilitating trade and investment flows within Africa. This represents another step towards realizing our collective aspirations for an integrated African market.”
Banque Centrale de Tunisie has decided to join PAPSS under the commercial bank settlement model that was introduced last year at the Afreximbank Annual Meetings in Accra, Ghana. By adopting this model, BCT will preserve its foreign currency reserves and promote the use of the Tunisian Dinar for cross-border payments with the rest of Africa. This strategic move will undoubtedly enhance the value of its currency in the near future and significantly decrease reliance on foreign currencies.
With this development, the Tunisian commercial banks can now commence their onboarding process onto the PAPSS system. The team of experts from PAPSS is fully prepared to assist and support Tunisian banks in successfully completing this process.
Launched two years ago, PAPSS has steadily expanded its footprint in Africa, now establishing itself in four regions. This network includes 13 central banks, with 6 in the West African Monetary Zone (WAMZ) region (Nigeria, Ghana, Guinea, Gambia, Liberia, and Sierra Leone), 3 in East Africa (Kenya, Rwanda, and Djibouti), 3 in Southern Africa (Zimbabwe, Zambia, and Malawi), and 1 in North Africa (Tunisia). Additionally, it is anticipated that more central banks will join the platform throughout the current year.
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About PAPSS:
The Pan-African Payment and Settlement System – PAPSS is a centralised Financial Market Infrastructure that enables the efficient flow of money securely across African borders, minimising 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”) first announced 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 the African Union recommitted and instructed the Afreximbank and the AfCFTA secretariat to finalise, 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. PAPSS was officially launched in Accra, Ghana, on January 13, 2022, thus making it available for use by the public.
SOURCE
Afreximbank