Afreximbank: In talks with CBE to activate Egypt's joining of PAPSS in H2-2023

Christiane Abou-Lehaf, the Head of International Cooperation at the African Export-Import Bank (Afreximbank), announced that discussions are underway with the Central Bank of Egypt and several commercial banks to activate Egypt's membership in PAPSS-payment and settlement platform launched by Afreximbank in January 2022.

These remarks were made during a press statement at the bank's annual meetings held from June 18th to 21st in Accra.

Abou Lehaf emphasized that Egypt's membership, led by the Central Bank and with the participation of several commercial banks, would enhance opportunities for companies and the banking sector to increase trade and investment with African countries using local currencies and overcome the major obstacle of foreign exchange pressures.

She pointed out that Afreximbank is making intensive efforts to facilitate trade transactions through the PAPSS settlement platform, which has made significant investments in its technological infrastructure to ensure successful commercial transactions in the shortest possible time and with a high degree of security.

She also noted that Afreximbank has already initiated the activation of the PAPSS platform with West African countries, which has proven successful in facilitating remittances during commercial transactions between African partners using each country's currency.

Afreximbank had previously anticipated that 15 to 20 countries would join the system by the end of the year, according to Benedict Oramah, the bank's president, in statements prior to the bank's annual meetings in Accra. The platform has already begun operations with nine signed countries so far.

Oramah stated that the system, known as PAPSS, currently uses the exchange rates of the dollar, adding, "But we are working with central banks to develop an exchange rate mechanism" that would allow the 42 African currencies to be convertible among themselves.

The majority of intra-African trade is conducted through transfers in dollars, and initiatives such as PAPSS and the African Continental Free Trade Area agreement, which aims to establish the world's largest free trade area in terms of landmass, seek to enhance intracontinental trade by reducing barriers, including the need for dollar transactions.

On another note, Head of International Cooperation at the African Export-Import Bank clarified that the total cooperation portfolio with Egypt amounts to $25 bn as of the end of September of the previous year, equivalent to 25% of the bank's total financing portfolio, which aims to support intra-African trade finance (export and import), direct investments, and various other development sectors.