Vice President, Dr. Mahamudu Bawumia has called for strict enforcement of the regulatory framework of the African Continental Free Trade Area, AfCFTA, for financial services to ensure the smooth and effective implementation of the Pan African Payment and Settlement System (PAPSS).
According to him, it is important that payments services regulation of member states are in line with international regulatory standards, such as those proposed by the Financial Action Taskforce on anti-money laundering among others.
The Pan African Payment and Settlement, PAPSS, one of the operating instruments of the AfCFTA is an instrument to boost intra-African trade, stimulate industrialisation and promote sustainable and inclusive economic growth in Africa.
Speaking at the commercial launch of the Pan-African Payment and settlement System in Accra, Dr. Mahamudu Bawumia also called for stakeholder collaboration to improve intra-African payments and boost intra-African trade.
“The biggest beneficiaries of PAPSS will be small and medium-sized businesses, investors who make high-value payments across the borders and consumers who have been using informal means to make cross border payments. I wish to reiterate that the AfCFTA regulatory framework for financial services should encourage member-states payments services regulation to converge towards international regulatory standards, such as those proposed by the Financial Action Taskforce on anti-money laundering and countering the financing of terrorism and the CPMI-World Bank General Principles for International Remittance Services. A genuine commitment to mutual recognition of regulatory regimes will also alleviate some of the challenges of regulatory divergence,” he said.
The commercial launch of the Pan-African Payment and settlement System was spearheaded by the AFCFTA Secretariat in collaboration with Afreximbank.
The Pan African Payment and Settlement System is expected to connect the entire continent and handle instant payments in multiple African currencies and provide a settlement mechanism that creates trust within the ecosystem.
This brings two critical changes to Africa’s trade finance; minimising the use of hard currency in trade payments, and domesticating payments and settlements within Africa.