Nine African countries join Afreximbank’s PAPSS platform in push for ‘de-dollarization’

A pan-African payment system that would allow African nations to trade among themselves, using their own currencies, is gaining momentum, as the platform has recently started commercial operations with nine countries having signed up so far, according to the Afreximbank President Benedict Oramah.
The African Export-Import Bank — or Afreximbank — expects 15 to 20 countries to have joined the Pan-African Payment and Settlement System (PAPSS) by the end of the year. The bank’s president said in an interview ahead of the lender’s annual meetings in Ghana’s capital. The PAPSS system is using dollar exchange rates for now, said Oramah, whose bank funds the system. “But we are working with central banks to develop an exchange-rate mechanism that would allow Africa’s 42 currencies to be convertible among themselves. What we are doing is to domesticate intra-African payments,” he said. With the vast majority of intra-regional trade in Africa being conducted through conversions to the US dollar, PAPSS, the African Continental Free Trade Agreement and other initiatives seek to boost internal trade by reducing barriers, including the need for intermediaries such as the greenback.
Some African leaders have increasingly called for the so-called ‘de-dollarisation’ — trade in currency other than the US dollar. The greenback has been the world’s reserve currency for over 75 years, but many nations, including in Africa, are now seeking to trade in local currencies to reduce costs, avoid sanctions and reshape the global financial system. For example, the South African High Commissioner to India has recently spoken out against the “domination” of the US dollar in the world economy. Also the President of Kenya, William Ruto, has repeatedly called on African leaders to move away from using the US dollar for intra-Africa trade, and to support the pan-African payments and settlement system, launched in 2022.