Can PAPSS make African money move like African goods? The payments plumbing behind the AfCFTA

A trader in Accra selling to a buyer in Lagos has long faced an absurdity: the payment for goods that crossed one border might travel through New York or London, converted twice through the dollar, shedding fees at every hop. The Pan-African Payment and Settlement System — PAPSS, launched commercially in 2022 by Afreximbank and the African Export-Import Bank's partners — was created to end that detour by settling African trades in African currencies.

Participation has grown steadily, with central banks and commercial banks connected across West, East and North African markets, and Afreximbank acting as main settlement agent — the hard-currency backstop that gives central banks confidence to let local-currency netting work.

The constraint is not technology but liquidity. Netting works best when trade flows are balanced; when they are not, someone must fund the residual in hard currency. That is why corridor expansion has favoured routes with two-way flows, and why the addition of an FX marketplace matters: it lets banks source each other's currencies directly rather than defaulting to the dollar leg.

For central banks the bargain is pragmatic. PAPSS reduces demand for scarce dollars in intra-African trade, which supports reserves; in exchange, participants must harmonise sanctions screening, messaging standards and settlement finality rules — sovereignty-adjacent territory where progress is measured in memoranda, not months.

The prize is large. Intra-African trade is projected to rise substantially under the African Continental Free Trade Area, and payment friction is consistently cited by exporters as a leading barrier. If PAPSS can cut settlement from days to seconds at a fraction of correspondent-banking cost, the payments plumbing will have done for African trade what the trade agreement alone cannot.

The test for the coming years: the CFA franc zones, where BCEAO and BEAC participation would connect fourteen more economies at a stroke — and where the euro peg makes the FX mechanics both simpler and politically more delicate.