The launch of the Pan-African Payment and Settlement System (PAPSS), will help boost the various currencies in Africa.
That, he said, would facilitate the move towards the adoption of a common currency in Africa.
For example, there have been attempts by the Economic Community of West Africa States to adopt a common currency called Eco.One of the convergence criteria is a stable and strong currency.
The Chief Executive Officer of PAPSS, Michael Ogbalu, said this in Accra on Thursday during the commercial launch of PAPSS, in response to a question whether the idea of a single currency in Africa had been abrogated with the launch of PAPSS.
PAPSS is aimed at facilitating trade and payments in the sub-region and is expected to save Africa $5 billion annually in payment cost.
An initiative of the Afreximbank, Africa Union and AfCFTA, PAPSS, is meant to connect payment and accelerate Africa’s trade.
Meant to transform how payments are made across borders in Africa, PAPSS is a cross border, financial market infrastructure instantly connecting payment transaction across Africa.
Among others, PAPSS is to simplify the historical complexities and costs of making payments across Africa’s borders, providing operational efficiencies that open up vast economic opportunities.
It also facilitates instant payments made by both originators and beneficiaries in their local currencies, anywhere in Africa.
It is backed by leading-edge technology connecting African banks, payment service providers and others in financial market infrastructure to enable instant and secure payments between African countries.
Mr Ogbalu said with the implementation of PAPSS, there would be no need for a third currency, example the dollar, to make payments in Africa.
“Strong demand for our local currencies will help boost their value,” he said.
The CEO of PAPSS indicated that currently only 20 per cent of payments made in Africa were terminated on the continent, with the 80 per cent going through the West before being terminated in Africa.
That, he said increased the cost of payments on the continent, making Africa to lose $5billion annually through payment charges.
“PAPSS will help address the high payment cost challenge facing the continent,” he said.
Mr Ogbalu said the implementation of PAPSS would help drive the cost of trade and goods and services down.
He said discussion were ongoing with other Central Banks and commercial banks to bring them on board the PAPSS platform.
Mr Ogbalu said the PAPSS had been successfully piloted in the West African Monetary Zone and now at the operational stage offering live payments services.
He said cyber security systems had been deployed in both the design and operational level to ensure the security of the platform.
The Chief of Staff of the African Continental Free Trade Area Secretariat, Silver Ojakol, said the PAPSS was to facilitate trade on the continent.
He said the initiative was to facilitate payments and address the delay associated with payments on the continent.
“AfCFTA is about trade and people on the continent wherever they are,” he said.