A free-trade area is only as free as its payments. The African Continental Free Trade Area lowered tariffs and opened markets, yet a Togolese firm paying a Nigerian supplier could still find the money itself taking the slow, expensive road, cleared through a bank abroad and converted through a foreign currency before it ever reached its destination. The rulebook said the border was open; the plumbing said otherwise. This month the continent started replacing the plumbing.
On 13 January 2022 Afreximbank and the African Union launched the Pan-African Payment and Settlement System, PAPSS, to enable cross-border payments and settlement in African currencies. The PAPSS launch in Accra presents a system built for real-time settlement, reduced dependence on third-country currencies, and direct payment infrastructure for AfCFTA commerce. For the region, the opportunity is less about a single product than about a shared rail that many businesses can build on.
The Regional Problem PAPSS Addresses
West Africa is a patchwork of currencies. The naira, the cedi, the CFA franc across the WAEMU zone and several others coexist across borders that AfCFTA is meant to make porous. Under the old arrangement, trading across those currencies meant routing payments through correspondent banks and a third currency, typically the US dollar, adding cost, delay and exchange-rate exposure to ordinary regional commerce. For small and mid-sized firms in particular, that friction has been a quiet barrier to trading beyond the home market.
PAPSS targets exactly this problem, offering to settle regional payments directly and in local currencies. It is shared infrastructure, and shared infrastructure lowers the cost of entry for everyone connected to it.
The border opens on paper first and in the payment system second, and business happens only when both are true.
The Capital and the Connections
The opportunity is regional, but it is unlocked institution by institution. PAPSS is anchored by Afreximbank’s settlement infrastructure alongside the African Union, and it becomes usable in a given market only as central banks and commercial banks integrate. That sequencing shapes where the early opportunity lies: the first corridors and currencies to come live are where banks, fintechs, exporters and importers can act first.
For a West African operator the question of who provides capital and who carries risk runs through the central institutions that stand behind settlement, while the question of who can enter runs through the banks and fintechs that connect clients to the rail. Both matter, and both determine how quickly the regional promise turns into regional practice.
A continental rail is laid one national connection at a time.
The AfCFTA Frame
Placed against the wider integration agenda, PAPSS is the financial counterpart to the trade agreement. AfCFTA, coordinated through the AfCFTA Secretariat, lowered the formal barriers to intra-African commerce; PAPSS attacks the informal one hiding in the payment chain. For West Africa, straddling ECOWAS and the WAEMU monetary zone, a system that settles directly in African currencies speaks to a daily reality, that the region’s fragmentation is monetary as much as it is regulatory.
The opportunity is genuine, and it is conditional on take-up. A payment network delivers its promise only where institutions connect; its regional value grows with every bank and central bank that joins.
Regional opportunity is not declared into being; it is connected into being.
The Operator’s Read
For a West African operator the decision is to enter, finance, supply, partner or monitor. A regional bank or fintech has reason to assess early integration and position for cross-border flows while the field is open. An exporter or importer trading across ECOWAS and WAEMU currencies should track which corridors go live and factor lower settlement and foreign-exchange costs into how it prices and where it sells. A firm without immediate cross-border exposure can monitor adoption and move when the corridors it uses are connected.
The measured conclusion is that PAPSS opens a real regional opportunity whose timing depends on integration rather than intention. It gives West African business a route to trade with its neighbours in its neighbours’ money, and to keep more of each transaction inside the region. The winners will be the operators who read the sequence of connections correctly and position on the corridors that come live first.
