Africa is losing an estimated $5 billion annually as a result of payment settlement inefficiencies associated with reliance on foreign currencies, the President of the Council of the Chartered Institute of Bankers of Nigeria (CIBN), Prof. Pius Olanrewaju, has disclosed.
Olanrewaju who spoke in Lagos on Tuesday at the inaugural and official launch of the Pan-African Payment and Settlement System (PAPSS) Cowry conference on worldwide and regional payment, said cross-border payment settlements poses one of Africa’s most pressing economic challenges.
The forum was hosted by PAPSS, Afreximbank, African Union and African Continental Free Trade Area (AFCFTA) Scretariat to spotlight PAPSS as a game-changing solution to unify the continent’s fragmented financial ecosystem.
Olanrewaju noted that for decades, African businesses and individuals involved in intra-continental transactions faced slow, costly processes, because they often relied on foreign currencies and external intermediaries.
“For too long, cross border payments within Africa have been very slow, costly and also dependent on foreign currency and external intermediaries. The system, designed without Africa’s unique economic realities in mind, has hampered regional trade and discouraged investment.
“The toll is severe. The urgency of our discourse today cannot be overemphasised. African loses an estimated $5 billion annually in settlement inefficiencies associated with reliance or non-Africa foreign exchange,’’ he said.
He stressed that these inefficiencies translated into higher costs and lost opportunities for the continent’s entrepreneurs, investors, and ordinary citizens, adding that in spite of the creation of large-scale initiatives, such as the AfCFTA, the impact had been muted by these barriers.
Intra Africa trade, he noted, remains at 18 percent, one of the lowest regional trade figures globally, highlighting the urgent need for reform.
He noted that PAPSS was a Pan-African solution designed to address these very inefficiencies, aiming to move Africa away from dependence on foreign currencies for local trade.
Since going live, he said PAPSS has expanded to 16 countries, connected over 150 commercial banks, and enabled settlements in local currency within 120 seconds.
This, he noted, signified a milestone for financial sovereignty and efficiency, marking a shift toward independence in the continent’s financial infrastructure.
“These are not just statistics. They are signals that Africa is building solutions rooted with its own realities,” the CIBN Chief said, adding that collaboration was needed among stakeholders to reverse the negative trend.
“This is the moment for policy makers, bankers and private sector leaders to run around, perhaps as a continental public. The collaboration between the charity of bankers of Nigeria and perhaps representing landmark in the evolution of Nigerian financial ecosystem.”
Olanrewaju said involvement of central banks, fintech startups, and financial institutions was also an imperative, adding that policy makers, financial institutions and fintechs and global partners could come together to imagine and build a truly sovereign and inter operate, operable African payment system.
“We recognise that payments are not just technical operations, yhey are instruments of sovereignty, competitiveness and continental unit.”
Earlier, PAPSS CEO, Mike Ogbalu, said that Africans must shape, control and direct their own payment systems, describing the Cowry platform as a space created to network, share ideas and co-create payment solutions that speak directly to African realities.
He noted that 160 commercial banks, 19 countries, 15 switches and five fintechs have already adopted PAPSS as their preferred payment settlement platform.
Ogbalu said Cowry would serve as a central hub for conversations on global and regional payments, hosting events and conferences that bring together stakeholders across the ecosystem.
He said the platform represented a deliberate effort to ensure that Africa’s voice was not only heard, but became influential in the global payments industry.
Also, Director, Digital Banking, Afreximbank, Mr Emeka Onya, highlighted the drive for sovereign payments’, said we need an African voice to drive the future of African players.
He said Afreximbank believes its guiding principle and approach in deploying digital infrastructure, thrives on the conviction that payments should start in Africa and settle in Africa.
“What we’ve done here is to build the mill, and now we’ve built the payment mill, we have created infrastructure to connect Africans together,” he added.
The ‘payment mill’, he said, alludes to the growing digital backbone underway, connecting markets within Africa and to the world, cautioning however that even the best systems must follow implementation.
Also, he said central to scaling African trade, are trust and data, adding that these are vital ingredients to expand businesses.
For inclusivity, Onya, emphasised an African marketplace where exporters, importers, logistics, and customs officials converged, adding that while avoiding exporters and importers, terms like logistics, warehouses, customs officials, all in one ecosystem to be able to connect them to each other.
He said the goal was to create a transparent environment where one gets the same quality and same and same standard from countries in Africa are not working from the west.
Afreximbank, he said, recognising persistent challenges, over the past 30 plus years, had been financing Africa to transform trade. (NAN)
