Governor of the Bank of Ghana, Dr. Ernest Addison has called for a multidimensional integrated solutions approach to tackle the inherent frictions in cross-border payments in Africa.
According to the World Economic Forum, payments which have always been the lifeblood of trade will be key for intra-African trade, which covers 55 countries with varying financial and monetary systems, especially with the implementation of the African Continental Free Trade Area agreement (AFCFTA).
Cross-border payments in Africa typically involve a third currency, such as the US dollar or euro, leading to high costs and long transaction times.
In his welcome address for the virtual Association of African Central Banks Annual Conference on Payment Systems, Governor of the Bank of Ghana, Dr. Ernest Addison noted that increased momentum in integrating payment systems on the continent is needed.
“To tackle these longstanding inherent frictions in cross-border payments requires a multidimensional integrated solutions approach, with strong stakeholder collaboration. Therefore to foster the transformation of payments systems infrastructure that supports economic diversification of the continent ongoing efforts at payment systems integration will require additional momentum.”
Dr. Addison meanwhile charged Central Bank Governors and other stakeholders tasked with ensuring the development and adoption of effective payment systems to consider mobile payment platforms as an affordable mode of payments.
“Mobile payment adoption is already high on the African continent, hence affordable intra-African mobile payment solutions should be explored to stimulate cross border retail payments and minimize the cost of regional operations especially for small and medium-sized enterprises.”
Dr. Bawumia calls for stakeholder collaboration to improve intra-African payments
Vice President, Dr. Mahamudu Bawumia has charged Central Bank governors across Africa to facilitate collaboration amongst key stakeholders to help with the integration of payment systems on the continent.
According to the World Economic Forum, payments which have always been the lifeblood of trade will be key for intra-African trade, which covers 55 countries with varying financial and monetary systems, especially with the implementation of the African Continental Free Trade Area.
Cross-border payments in Africa typically involve a third currency, such as the US dollar or euro, leading to high costs and long transaction times. In an effort to improve the situation, the African Export-Import Bank (Afreximbank) and the AfCFTA Secretariat announced in September this year, the operational roll-out of the Pan-African Payment and Settlement System (PAPSS), a revolutionary Financial Market Infrastructure to enable instant, cross-border payments in local currencies between African markets.
In his address as the Guest of Honour for the virtual Association of African Central Banks Annual Conference on Payment Systems hosted by the Bank of Ghana, under the theme “The Role of an Integrated Payment System for Intra African Trade”, Vice President Dr. Mahamudu Bawumia, noted that Africa has been primed to by the push for digitalization by COVID to provide the required payment infrastructure and systems to boost trade.
“The achievement of the noble objectives of the AFCFTA will largely depend on the establishment of a robust payment and settlement system that is secure and guarantees finality of payment. Let me say that with the added impetus for digitalization brought on by the pandemic, Africa is now better positioned to provide the required integrated payment infrastructures and systems to boost trade.”
Dr. Bawumia meanwhile charged Central Bank governors across Africa to facilitate collaboration amongst key stakeholders to help with the integration of payment systems on the continent.
“In conclusion let me re-emphasize that stakeholder collaboration is necessary for the smooth operation of an integrated regional payment system.”
