This is because PAPSS, a centralised payment and settlement system that allowed local currencies trade transactions, would make transaction among businesses instant and direct, and cut away intermediaries who contribute to financial losses.

The participating African Central Banks would act as clearing agents, while Afreximbank would be the primary clearing agent and provider of settlement guarantees and overdraft facilities.

This will remove the need to convert the currencies through intermediaries.

Nana Benneh said that the move would enhance trading activities on the Continent through the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA is a strategic trade pact created among African Union (AU) nations to provide a single continental market for goods and services with free movement of business persons and investments.

Nana Benneh expressed his optimism in PAPPS boosting intra-African trade during a panel discussion at a recent 2022 public forum by the Ghana Academy of Arts and Sciences (GAAS) on the topic: “African Continental Free Trade Area: Challenges and Prospects.”

He said: “It is on record that Africa has some of the highest remittance and settlement charges. It is estimated that we lose at least $5billion annually on transfer charges alone. What PAPSS offers is an ability to go around these charges, cut out the middleman, and trade peer to peer.”

“Thus, customers can go to a Ghanaian Bank to trade with their peers in Kenya, and that transfer from a Ghanaian Bank to a Kenyan Bank will happen Cedi to shilling directly,” Nana Benneh added.

The UMB CEO stated that the Bank recognised such payment and settlement platform as “the next growth variable in African Banking” adding that the Bank was working on innovations in that regard.

Dr Ernest Addison, Governor, Bank of Ghana (BoG) pointed out that the passage of the Payment Systems and Services Act 2019 (Act 987), and other interventions has paved the way for the non-banking sector, including financial technology firms, to work in the payment ecosystem.

This has led to tremendous growth in the payment system in Ghana, and required that such growth be extended to all African countries to ease intra-trade on the continent.

He noted that: “A strong and well-regulated African financial infrastructure could deepen the benefits of intra-regional trade, eliminate use of third currency for settlement, improve liquidity management of firms, and reduce transaction costs.”

Beyond the improved speed and lowering of cost of transactions, an integrated African payment and settlement systems would support AfCFTA by mitigating risks associated with intra-African trade payments and facilitate efficient functioning of African financial markets,” he added.

The Governor noted that PAPSS would be that strategic infrastructure to ensure seamless transactions, as it would also facilitate remittances, offer securities settlement and provide opportunity for Point of Sales and Automated Teller Machine transactions.