By Adéṣẹ́gun Ọṣìbánjọ
Africa stands at the cusp of economic reinvention. In the quest for continental financial integration, two major approaches have emerged: the long-debated idea of a Single African Currency and the bold, operational Pan-African Payment and Settlement System (PAPSS).
While both aim at unifying Africa’s fractured trade and payment ecosystems, PAPSS presents a faster, less politically entangled, and more technologically feasible pathway. It is an innovation birthed by Africa, for Africa, and, if properly harnessed, it could render the notion of a single African currency almost redundant.
A Rejoinder to “A Single African Currency: Unlocking Tourism and Trade”
In a previous article titled “A Single African Currency: Unlocking Tourism and Trade,” I argued the merits of a shared currency in fostering cross-border ease of movement, tourism development, and regional trade.
While the aspirations remain valid, the dynamics have shifted. PAPSS has emerged not merely as an alternative but a potentially superior, scalable model.
Rather than reinvent the entire monetary structure, PAPSS builds on existing institutions to deliver results now, not in a speculative future. The system’s agility, real-time transaction capability, and seamless integration of African currencies offer a more inclusive and implementable framework.
Understanding PAPSS: The African Game-Changer
The Pan-African Payment and Settlement System (PAPSS), developed by the African Export-Import Bank (Afreximbank) in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat, enables instant, cross-border payments in local African currencies. It allows businesses and individuals across the continent to transact in their respective national currencies, while the system handles the settlement in real-time behind the scenes.
This means a Nigerian exporter can trade with a Ghanaian buyer, and each can pay and receive in their respective currencies—naira and cedi—without recourse to a third-party foreign currency like the U.S. dollar or Euro. That’s not just innovation; that’s sovereignty in motion.
The Vision of a Single African Currency
The idea of a single African currency has long been touted as a silver bullet for intra-African trade. It promises reduced transaction costs, ease of movement, and the symbolic unity of the African economic space. But despite its promise, the political and economic diversity of Africa has made this vision an uphill battle.
Unlike the European Union which shares closer historical, linguistic, and economic ties, Africa’s vast plurality complicates the adoption of a single currency. Central banks operate with varying mandates, and inflationary and monetary policy regimes differ greatly. Moreover, the political will required to surrender parts of national monetary sovereignty remains a major roadblock.
PAPSS: The Practical Alternative
Where a single currency stumbles, PAPSS sprints. The beauty of PAPSS lies in its simplicity and pragmatism. It does not require countries to cede monetary control. Rather, it integrates them into a seamless payment system that preserves local financial identities while fostering continental integration.
Here are the key advantages of PAPSS over a single African currency in narrative form:
Preservation of Monetary Sovereignty: PAPSS allows countries to retain their own currencies and central bank policies. Unlike a single currency, it doesn’t compel countries to merge their monetary strategies, which is politically sensitive and economically risky.
Reduced Political and Bureaucratic Bottlenecks: Creating a single currency would require decades of political alignment, treaty modifications, and the establishment of supranational monetary institutions. PAPSS bypasses this maze by operating within existing frameworks, accelerating implementation.
Faster Integration: PAPSS is already live and being piloted. A single currency remains a dream with no definitive timeline. PAPSS offers immediate solutions that can evolve organically.
Currency Conversion Elimination: PAPSS eliminates the need for dollar-based conversions for intra-African trade. This reduces the continent’s dependency on foreign reserves and insulates transactions from the volatility of external currencies.
Encourages Regional Economic Growth: By reducing the cost and complexity of transactions, PAPSS stimulates local trade, boosts SMEs, and empowers entrepreneurs without the transitional pain of a new currency.
Technological Innovation: PAPSS is a tech-forward initiative, embracing modern FinTech principles and integrating with banking apps, mobile money, and digital wallets.
Stakeholder Responsibilities
For PAPSS to reach its full potential and become a globally celebrated African innovation, all key stakeholders must act decisively and collaboratively:
• African Union (AU): As the continental governing body, the AU must promote PAPSS across all member states, integrate it into its Agenda 2063 framework, and position it as a flagship initiative.
• AfCFTA Secretariat: Must embed PAPSS into its trade facilitation protocols, encourage member compliance, and monitor interoperability.
• Member States: Governments must domesticate PAPSS policies, provide legislative backing, and invest in digital infrastructure to support interconnectivity.
• Central Banks: These are the gatekeepers of trust. Their participation is vital in aligning settlement frameworks and ensuring transparency and regulatory compliance.
• Commercial Banks and Financial Institutions: These must adapt their systems to PAPSS, train staff, and provide educational tools for customers.
• FinTech Companies and App Developers: Innovation hubs must design secure, intuitive interfaces and digital wallets that integrate PAPSS APIs and protocols.
• Security and Cyber Agencies: Must provide a robust cybersecurity framework to ensure PAPSS is resilient to cyber threats and instills confidence in users.
Making PAPSS Embraceable and Implementable Across Africa
To scale PAPSS and make it the continental default, certain practical strategies must be executed:
Public Education and Sensitisation Campaigns: Citizens and businesses need to understand PAPSS—its benefits, security, and how to use it. Grassroots campaigns, media partnerships, and financial literacy drives are crucial.
Mobile and Digital Integration: PAPSS must integrate with mobile banking, USSD platforms, and mobile money services to reach the unbanked and underbanked populations.
Incentives for Banks and Merchants: Banks should be incentivised through regulatory concessions or tax reliefs to join PAPSS. Merchants can be given subsidies to adopt PAPSS-enabled platforms.
Partnerships with Telecommunications Firms: These are critical for data access and platform dissemination, especially in rural communities.
Cross-continental Demonstration Projects: Use PAPSS to settle regional projects like rail, road, or power infrastructure to prove viability.
Global Partnerships: Collaborate with platforms like SWIFT, World Bank, and IMF to gain global validation and cross-border expansion.
A Global Model from Africa
Africa rarely gets the credit it deserves for innovation. PAPSS, however, is a bold exception. If Africa embraces and scales this innovation, PAPSS could become a global model for regional trade systems elsewhere in Latin America, Asia, and the Caribbean, where similar trade frictions exist.
It represents not just an African solution to an African problem but a world-class innovation birthed on African soil. This must be celebrated and supported at all levels of government, the private sector, the diaspora, and civil society
Conclusion
Africa must not waste precious decades chasing a utopian monetary union while opportunities for real-time, real-world financial integration exist today. PAPSS gives us that opportunity.
Rather than forcing one currency upon a diverse continent, let us empower many currencies to work together seamlessly. Let us shift the conversation from uniformity to interoperability, from theory to action, and from political hurdles to technological solutions.
The Pan-African Payment and Settlement System is not just a financial tool—it is an idea whose time has come. It is time we make it the cornerstone of Africa’s economic renaissance.
God bless Africa!!!
Engr. Adéṣẹ́gun Olútáyọ̀ Adéolú Ọṣìbánjọ BENG, MBA, MNSE, MNIEE, MCIPSMN
Convener, Africa Woke Citizens Platform (AWCP) | Lead Consultant, MaakBeat Transnational Ltd
Pan-African Policy Architect | Energy Consultant | Technical Writer | Global Affairs Analyst
My TV Guest Appearances & Video Links:http://youtube.com/post/UgkxTHsVgG2zByqcZ6Oqs5zqmfRybiYd_pXo?si=lRJBdEn1xYP16KO-
My Published Works: http://youtube.com/post/UgkxIZmGA1IgwTgXAwTRNyk71P2xru9Qs-6C?si=Lx6TeWlZM3MA0MYe