Intra-African trade encounters numerous obstacles, including the absence of a unified payment system. The adoption of Papss addresses these challenges by streamlining payment processes and reducing dependence on foreign currencies, thereby promoting increased trade within Africa and enhancing economic integration.

Kenyan President William Ruto has called on commercial banks to expedite their adoption of the Pan-African Payments and Settlement Systems (Papss), urging them to transition away from using the U.S. dollar for intra-African trade. The president revealed this at the launch of the Micro, Small and Medium Enterprises Accelerator programme at the Kenyatta International Convention Centre, Nairobi, on Wednesday, October 16.

Ruto emphasized the need to reduce transaction costs on the continent, which currently result in Africa losing over $5 billion annually. “With Papss, we can conduct transactions in our local currencies, significantly lowering exchange rate challenges and reducing transaction costs for businesses across Africa,” he noted, further encouraging banks to sign on to the system to enhance regional trade.

Raimond Molenje, acting CEO of the Kenya Bankers Association, confirmed that the association is actively working with the Central Bank of Kenya to implement a national switch to the Papss system, which would facilitate smoother trade with neighboring East African countries. This development aligns with Papss's goal of creating a single market for Africa and increasing intra-continental trade.

Papss, which was introduced by the African Continental Free Trade Area (AfCFTA) in 2019, facilitates seamless payments in local currencies across African nations. Initially piloted in the West African Monetary Zone, it was formally rolled out by Afreximbank in September 2021, with full operations beginning in early 2022.

The AfCFTA creates a single market for goods and services, allowing Kenyan businesses to access a market of over 1.3 billion people and a combined GDP of over $3.4 trillion. This significantly expands their customer base and revenue potential.

 Hikmatu Bilali