Kudzanai Sharara in Cape Town, South Africa
Zimbabwe is processing $5.8 million a month through the Pan-African Payment and Settlement System (PAPSS) as Chinese currency clearing is gradually pulled into the platform and run through the domestic banking system, the African Export-Import Bank (Afreximbank) has disclosed.
Peter Adeshola Olowononi, Director of Regional Operations for Afreximbank’s Southern African Region, told delegates at the CEO Africa Annual Roundtable in Cape Town that the continent’s trade settlement architecture is being rebuilt around digital platforms and local currencies.
“I was happy to see the statistics in Zimbabwe last week — $5.8 million a month. We’re gradually pulling the Chinese funds into that platform and running it through the banking system,” Mr Olowononi said.
PAPSS, which Afreximbank has positioned as the clearing backbone for intra-African trade, settles transactions in local currencies rather than through correspondent banks in Europe and the United States. Mr Olowononi set out how the system operates in practice.
“A buyer in Ghana paying in cedis is settling his brother across the fence — or maybe not directly over the fence — in Nigeria, in naira. And Afreximbank in the middle, serving as the clearing house,” he said.
He said the platform has extended further. “We’ve gone further to even incorporate the CIPS, the Chinese Interbank Payment System, and we are clearing Chinese currencies. Again, all of this through digital means.”
Mr Olowononi said most banks in Southern Africa have joined PAPSS, and that Afreximbank is working to integrate the platform with a similar system created by the South African Reserve Bank. “We’re still pushing the South African Reserve Bank, because there’s a similar platform which they have created, to see how we integrate both platforms,” he said.
Mr Olowononi was speaking at the CEO Africa Annual Roundtable, which runs from 6 to 10 October under the theme “The Future of Africa: Innovate, Trade and Grow”.
