The Pan-African Payment and Settlement System (PAPSS) is a centralized Financial Market Infrastructure that will enable an efficient and secure flow of money across African countries. The platform is set up to minimize risk and contribute to financial integration across the regions. PAPSS is an African Union payment system developed in collaboration with the African Export-Import Bank (Afreximbank).
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In line with this, the Central Bank of Kenya has formally opened discussions to join the Africa-wide cross-border payment system, which will mitigate the dollar shortage crisis facing Kenya and other African economies. During the monetary policy committee talks held on Tuesday, the president of the central bank of Kenya confirmed that talks are underway for Kenya to actualize the African Union-backed platform in Kenya. So far, five African multinational commercial banking groups, including KCB Group, Access Bank Group, Eco Bank Group, Standard Bank Group, and UBA Group, have already signed memoranda of understanding to join the platform. Kamau Thugge noted that the new payments platform comes when there is an urgent need to alleviate the foreign exchange currency shortage. He added that this move would help enhance trade as it would help Kenyan traders identify new opportunities in the African Continental Free Trade Area.
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The Pan-African payment and settlement system will give Kenya the opportunity to pay for intra-African trade transactions using their local currency. Speaking before the African Private Sector Dialogue on the African Continental Free Trade Area in Nairobi, President Ruto highlighted that the African continent is struggling and traders are finding it hard to make payments from one country to another due to currency differences. The dominance of the dollar has increased the costs of these transactions, whereas PAPSS will ensure that transaction costs will be reduced as countries under the platform will not be required to convert their local currencies into dollars.
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