Ruto urges banks to join pan-African payment system

Kenyan President William Ruto is urging commercial banks to expedite plans to sign on to the Pan-African Payments and Settlement Systems (Papss) to avoid using the dollar.

The Papss agreement signed on September 29, 2023, features Kenya, Djibouti, Ghana, Guinea, Liberia, Nigeria, Sierra Leone, The Gambia, Zambia and Zimbabwe.

“We want to reduce our transaction costs, especially for products and trade that are transferred,” President Ruto said at the official launch of the Micro, Small and Medium Enterprises Accelerator programme and the release of the Banking Industry Total Tax Contribution Report on Wednesday at the Kenyatta International Convention Centre in Nairobi.

He pointed out that Africa losses over US$5 billion in payment transaction costs each year.

“With the Papss, we can sell and buy products from the continent in our local currencies,” he said.

“Not many banks are using that system. I want to encourage more banks to join the system. It is good for you. It reduces your transaction costs, reduces unnecessary exchange rate issues and helps us pay for products from different countries.

“Our traders don’t have to run around trying to change money from currency to another,” he said.

Raimond Molenje, acting Kenya Bankers Association chief executive officer, said the banks were keen to join the system.

“We are having a meeting with the Central Bank of Kenya to ensure that we have a national switch to the system. We need to have a central payment system in the country so that we can trade with other East African countries,” he said.

The Papss was launched in 2019 by the African Continental Free Trade Area (AfCFTA) to create a single market facilitated by movement of persons, liberalisation of markets in Africa, and boost intra-African trade.

Afreximbank on September 28, 2021announced the formal rollout of the system to serve as a continentwide platform for the processing, clearing and settling of intra-African trade and commerce payments.

On January 13, 2022, Papss officially launched activities after a pilot phase in the West African Monetary Zone.  – The East African