Pan-African Payments System (PAPSS) to launch African currency marketplace

The Pan-African Payments and Settlement System (PAPSS), a pioneering pan-African payments infrastructure provider designed to enhance cross-border trade across Africa, is launching an African currency marketplace later this year.

Backed by 15 central banks and currently integrated with 150 commercial banks, PAPSS aims to address long-standing liquidity and currency exchange challenges by enabling direct trading of local currencies, according to its CEO,  Mike Ogbalu.

According to Reuters, Ogbalu revealed that the platform will complement PAPSS’s existing payments infrastructure.

“The rates will be market-driven, and our system is able to do a matching based on the rates offered by the different participants in our ecosystem,” he said.

The initiative seeks to deepen financial integration and boost commerce by eliminating the need for third-party currencies, such as the U.S. dollar, in intra-African transactions.

Africa’s foreign exchange markets have long been plagued by shallow liquidity, with trading heavily concentrated in South Africa and Nigeria. For businesses and individuals seeking to exchange other African currencies, the process often requires first converting to dollars, a costly and inefficient step.

The Africa Currency Marketplace aims to streamline this process. Ogbalu cited a practical example: an Ethiopian airline selling tickets in Nigerian naira could exchange its revenue directly with a Nigerian company trading in Ethiopia using Ethiopian birr.

“Our system will intelligently match them, and then party A will get naira in Nigeria and party B will get birr in Ethiopia. The transaction just completes without any third-party currency being involved at all,” he said.

Other efforts at streamlining currency exchanges

The initiative arrives amid broader currency reforms in Africa, with countries like Nigeria, Egypt, and Ethiopia transitioning to more market-based exchange regimes. However, challenges persist, particularly in markets like South Sudan and the Central African Republic, where violence or economic instability often triggers dollar shortages.

Companies operating in such regions often struggle to repatriate revenue, forcing annual write-downs to account for currency revaluations or investments in assets like real estate to preserve value. While some have turned to cryptocurrencies like Bitcoin to circumvent these issues, their adoption remains limited due to inadequate legal frameworks in countries like Kenya.

Ogbalu described the platform as “transformational,” emphasising its potential to unlock new opportunities for businesses frustrated by currency volatility and repatriation hurdles.

PAPSS, developed by the African Export-Import Bank (Afreximbank) in collaboration with the African Union Commission (AUC) and the African Continental Free Trade Area (AfCFTA) Secretariat, has already made strides in facilitating intra-African trade since its launch in 2022. The system is designed to reduce the continent’s reliance on offshore payment routes, which currently handle over 80% of cross-border transactions, costing businesses an estimated $5 billion annually in fees.

Recent milestones underscore PAPSS’s growing footprint. In February 2025, KCB Group in Kenya and Bank of Kigali in Rwanda became the first banks in their respective countries to integrate PAPSS, enabling faster, cheaper, and more secure transactions via mobile apps and branch networks.

The Central Bank of Egypt also joined the system in December 2024, signalling Egypt’s commitment to deepening economic ties with Africa. These integrations align with PAPSS’s goal of boosting intra-African trade, which currently accounts for just 16% of the continent’s total trade volume.

Analysts see the currency marketplace as a potential game-changer for small and medium-sized enterprises which often lack the resources to navigate Africa’s fragmented financial systems. By reducing transaction costs and exchange rate risks, the platform could unlock new opportunities for businesses operating across borders.

However, its success will hinge on widespread adoption by commercial banks and the ability to maintain competitive, market-driven rates.

As PAPSS prepares to roll out the Africa Currency Marketplace later this year, anticipation is building among stakeholders eager to see its impact on a continent where trade has long been hampered by currency barriers. For now, Ogbalu and his team remain focused on fine-tuning the system, confident that it will pave the way for a more integrated and prosperous African economy.