At the Africa Prosperity Dialogues 2025, AfCFTA Secretary-General H.E. Wamkele Mene emphasized that these initiatives align with the African Union’s ultimate goal of transforming the continent into a global powerhouse that is prosperous, peaceful, and united. He noted that these initiatives are essential for fostering deeper economic integration, strengthening trade resilience, and positioning Africa as a competitive player in the global economy.

Pan-African Payments and Settlements System (PAPSS)

The Pan-African Payment and Settlement System (PAPSS), developed in partnership with Afreximbank, is a centralized financial market infrastructure designed to facilitate the efficient and secure flow of money across African borders. PAPSS enhances financial inclusion by providing access to payment services for underserved populations. The system allows traders to make payments in local currencies, which helps reduce trade costs and improve financial connectivity among African economies.

H.E. Mene highlighted that PAPSS is crucial for enabling smooth cross-border transactions, particularly now that the Africa Continental Free Trade Agreement is fostering increased cross-border trading. PAPSS is well-equipped to manage the anticipated rise in cross-border payments. Its security and compliance measures are also effective in preventing money laundering and the financing of terrorism. Additionally, PAPSS can help reduce Africa's dependence on foreign currencies by promoting the use of local currencies for cross-border transactions.

How It Works

PAPSS collaborates with Africa's central banks to offer a payment and settlement service that allows commercial banks and licensed payment service providers across the region to connect as "Participants." This payment system facilitates three key processes: instant payment, pre-funding, and net settlement, enabling instant payments in local currencies across African borders.

• Instant Payment: PAPSS allows instant cross-border payments across Africa. Also, compliance, legal, and sanctions checks are conducted instantly within the system, allowing for near-instant payment processing within 120 seconds.
• Pre-Funding: Given the speed of the real-time payment process, PAPSS must ensure that sufficient funds are available to complete the originator's transaction before executing the movement of debits and credits between participants' accounts.
• Net Settlement: PAPSS guarantees prompt settlement within 24 hours. Net settlement across all participating central banks occurs simultaneously at 11:00 UTC every day.

With its real-time infrastructure, PAPSS provides a reliable and cost-effective solution for instant payments. Users can transfer money, pay salaries, shop, trade stocks and shares, or conduct high-value business transactions – all on one platform.

AfCFTA Adjustment Fund

The AfCFTA Adjustment Fund is a $10 billion initiative designed to support African countries as they integrate into the AfCFTA’s single market. This fund aims to assist both countries and private entities through various means, including financing, technical assistance, grants, and compensation funding. Its purpose is to facilitate the transition to the new trading system while mitigating any negative impacts that may occur during this process.

The AfCFTA Adjustment Fund addresses potential losses in tariff revenue that may arise from implementing the AfCFTA Agreement. It also aims to enhance the economic resilience and competitiveness of AfCFTA State Parties. Additionally, the fund seeks to promote the growth of intra-African trade and the development of regional value chains.

How It Works

The AfCFTA Adjustment Fund comprises three sub-funds: the Base Fund, the General Fund, and the Credit Fund.

• The Base Fund: This fund utilizes contributions from AfCFTA State Parties, along with grants and technical assistance, to address tariff revenue losses resulting from the implementation of the AfCFTA Agreement.
• The General Fund: The purpose of this fund is to finance the development of trade-enabling infrastructure.
• The Credit Fund: This fund mobilizes commercial funding to support both the public and private sectors, helping them to adjust and seize the opportunities created by the AfCFTA.

AfCFTA Digital Trade Protocol 

The AfCFTA Digital Protocol aims to create a digital framework that facilitates trade, economic growth, and development throughout the African continent. It is structured into eleven sections that address key areas such as market access, the promotion of digital trade, data governance, building trust among businesses and consumers, fostering inclusion in digital trade, exploring emerging technologies, ensuring transparency in government regulations, and enhancing capacity building to support digital trade.

Key Provisions of the AfCFTA Digital Protocol

• Digital Trade Rules: The AfCFTA Digital Protocol establishes common rules and guidelines for digital trade, which include electronic signatures, data protection, and consumer protection.
• Customs Procedures: It harmonizes customs procedures related to digital trade, incorporating electronic payment systems and digital certificates of origin.
• Telecommunications: The protocol fosters cooperation in the development of telecommunications infrastructure, including mobile payments and digital financial services.
• Cybersecurity: The AfCFTA Digital Protocol creates a framework for collaboration on cybersecurity, which encompasses data protection and incident response.

H.E. Mene emphasized that the Digital Trade Protocol is essential for strengthening Africa’s digital economy by providing a structured legal framework for e-commerce, fintech, and digital trade. This framework enhances regulatory certainty and promotes digital transformation across the continent.

The AfCFTA Digital Protocol aims to encourage investment in digital infrastructure, including data centers, cloud services, and cybersecurity. It also seeks to promote the growth and development of e-commerce in Africa, enhancing the continent's competitiveness in the global digital economy. By simplifying and reducing the cost of trade, the protocol makes it easier for businesses to access new markets and creates new job opportunities in the digital sector.

The African Continental Free Trade Area (AfCFTA) is a flagship project of the African Union’s Agenda 2063: “The Africa We Want.” This ambitious trade agreement aims to create a single unified market for Africa by eliminating trade barriers and advancing value-added production across all service sectors of the African economy. Since its launch in 2019, AfCFTA has sought to enable the free flow of goods and services across the continent, improving Africa's trading position in the global market. To date, 55 countries have signed the AfCFTA agreement. AfCFTA projects a $450 billion income boost for Africa by 2035, with the potential to lift 30 million people out of extreme poverty.

REFERENCE

Information form https://au-afcfta.org/, https://papss.com/about-us/, and https://www.afreximbank.com/inaugural-board-meeting-of-the-afcfta-adjustment-fund-corporation-holds-in-the-republic-of-rwanda%EF%BF%BC/ was used in this story