PAPSS and ASEA partner to revolutionize cross-border payment of Stock Exchanges in Africa
A Memorandum of Understanding (MoU) was signed by the Pan African Payment and Settlement System (PAPSS) and the African Securities Exchange Association (ASEA) to improve collaboration and cooperation in boosting cross-border payments of capital markets infrastructure in Africa. The Memorandum of Understanding (MoU) was signed on April 14, 2023, at the ASEA 2023 Building African Financial Markets Seminar in Victoria Falls, Zimbabwe, which brought together stock exchanges and stakeholders from the capital markets of Africa to discuss ways to further integrate and connect African capital markets.
Investors conducting business in Africa have long had difficulty sending and receiving cross-border payments. Payments are made in foreign currencies (USD or EUR), take a long time to complete, and are expensive due to the current climate, which requires the use of correspondent banks outside of the continent. PAPSS, which facilitates immediate cross-border payment in local currency, was created by the African Export and Import Bank (Afreximbank) and the African Continental Free Trade Area (AfCFTA) Secretariat as a result.
PAPSS presents an opportunity as the payment system to further improve the African Exchanges Linkage Project (AELP), a flagship project of ASEA to facilitate cross-border trading of securities in Africa, through the umbrella of ASEA, with 9 exchanges and a combined market capitalization of $1.5 trillion. After going online in Nigeria, Ghana, Liberia, the Gambia, and Guinea, which make up the West African Monetary Zone (WAMZ), PAPSS has begun a rapid rollout of its system over all of Africa. Zimbabwe, Zambia, and Djibouti have recently joined the network as a result, and they’ll be running soon. Through this collaboration with ASEA, PAPSS implementation across ASEA member countries would also be made easier.
PAPSS’s Chief Executive Officer, Mr. Mike Ogbalu III, commented on the signing by saying: “PAPSS enables a wide variety of use cases, including cross-border retail and trade transactions for individuals and businesses as well as cross-border investments with the African Stock Exchanges. Working with ASEA, which developed the AELP and made cross-border securities trading a core tenet, is thus a crucial step in the implementation of PAPSS across the continent.
This collaboration demonstrates our dedication to promoting commerce and economic development in Africa. By working together, we hope to develop a trustworthy and effective payment system that will make it simple for investors to trade on several African stock exchanges. The first thing we need to do is put together a team between PAPSS and ASEA as soon as possible to figure out how to make it easier to move money across African Stock Exchanges that are members of ASEA. In light of this, I’d like to offer an invitation to the relevant capital market participants to participate with us in this innovative project for the African business and investment communities.
Thapelo Tsheole, President of ASEA and CEO of the Botswana Stock Exchange, stated: “We are thrilled to cooperate with PAPSS on this significant effort. Our effort to integrate the capital markets through the AELP will be crucial in developing Africa’s capital markets and encouraging international investment. The cross-border transmission of cash among the participating exchanges will be greatly aided by PAPSS’s competence in payment settlement.
PAPSS is steadfast in its commitment to promoting the expansion of a thriving payment environment and stimulating the creation of fresh approaches for the economic prosperity of the African continent and its people.
