The Pan-African Payment and Settlement System (PAPSS) in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat, has signed a Memorandum of Understanding (MoU) with BUNA.
The News Agency of Nigeria (NAN) reports that PAPSS is operated by the African Export-Import Bank (Afreximbank)
This is contained in a statement signed by Mr Papa Thiongane, the Manager, Marketing and Communications, PAPSS, in Abuja on Wednesday.
PAPSS is a centralised Financial Market Infrastructure that enables the efficient flow of money securely across African borders, minimising risk and contributing to financial integration across the regions.
According to Thiongane, BUNA is the cross-border and multi-currency payment system owned by the Arab Monetary Fund (AMF).
He said it was aimed at enabling financial institutions and central banks in the Arab region and beyond to send and receive payments in local currencies and key international currencies.
The marketing manager said that interoperability among payment systems as the foundation for enhancing cross-border payments, required technical process and business system compatibility so that end users could seamlessly transact with each other across systems.
“This collaboration lays the foundation for the interoperability between PAPSS and BUNA payment systems.
“Their participants will be able to make fast, secure and affordable transactions in their local currencies between the African continent and the Arab region.’’
Thiongane said that PAPSS was aggressively expanding its footprints across Africa, with eight central banks, six switches and about 25 of the largest commercial banks on the continent.
He said that PAPSS had also signed very significant strategic relationships with other key institutions.
“By joining PAPSS, banks enable their customers to trade within Africa. Each bank joining PAPSS has access to tens of thousands of end-users already connected across the platform’s growing community of financial institutions.
“Central banks joining the PAPSS infrastructure extends the collective reach of the payment system to millions more, with the resultant positive impact on intra-African Trade
He said that the collaboration between PAPSS and Buna would further these benefits to the Buna network and vice versa.
“Together we will create the foundational support for the innovation of trade and payment solutions which will significantly enhance the economy of both regions.’’
He said that PAPSS also planned to collaborate with other regional and continental cross border payments systems to extend its range beyond the African borders to support the growth of trade and investments with the African continent.
The statement quoted Prof Benedict Oramah, President and Chairman, Board of Directors of Afreximbank and Chairperson of PAPSS Management Board, as saying “the MoU with BUNA is another important step that PAPSS has taken after its commercial launch’’.
Oramah said that the Arab World and Africa had a long history of trade relations, adding that the PAPSS-BUNA partnership would further facilitate the growth of trade between the two regions.
He said that the integration would provide banks across Africa and the Arab World with a seamless and one-stop centre to help their clients transfer value to their counterparts in either region.
“As chairperson of the Arab-Africa Trade Bridges (AATB), I am very proud of this outcome and thank the Arab Monetary Fund, Badea and the Islamic Trade Finance Company (ITFC) for their strong partnership.”
Dr Abdulrahman Al Hamidy, the Director -General Chairman of the Board of the Arab Monetary Fund, was quoted as saying “we highlight the important role of Afreximbank and the AMF in leading strategic initiatives.
“That can strengthen the economic ties between the Arab region and the African continent and support the global efforts to promote financial inclusion and improve access to appropriate financial services.
“Buna’s success to establish interoperability with regional market infrastructure like PAPSS is another key milestone in Buna’s continuous efforts to expand its regional and global network and increase the value it brings to its participants.”
The CEO of PAPSS, Mr Mike Ogbalu was quoted as saying, “PAPSS being Africa’s premier continent-wide payment rail specifically designed to transform trade on the continent is focused on the impact and not on short-term commercial benefits.
Ogbalu said that PAPSS had been able to strike a balance between these objectives and ensure that commercial value was not destroyed for its stakeholders.
“Sustaining this impact focus in its collaboration with Buna will have a dramatic impact on trade between Africa and the Arab world, and this is very exciting.’’ (NAN)