Africa Loses $5bn Annually to Currency Conversion – AfCFTA
Africa forfeits an estimated $5 billion every year due to currency conversion bottlenecks that continue to undermine intra-continental trade, the African Continental Free Trade Area (AfCFTA) secretariat has warned.
Speaking at the PAPSS COWRY Conference on Worldwide and Regional Payments in Lagos, AfCFTA Secretary-General, Wamkele Mene, said Africa’s fragmented currency landscape—comprising 42 national currencies—remains a major obstacle to trade integration. He noted that most cross-border transactions still rely on third-country currencies such as the US dollar and euro, driving up costs and weakening the competitiveness of African businesses.
“PAPSS is not simply a technological upgrade. It is a key enabler of AfCFTA, giving practical effect to our vision of a fully integrated African market,” Mene said, stressing that Africa cannot build competitive value chains while cross-border payments remain dependent on external currencies.
The Pan-African Payment and Settlement System (PAPSS)—implemented by Afreximbank under the African Union’s mandate—enables instant cross-border settlement in local currencies within 120 seconds. The platform now connects 19 countries, 160 commercial banks, and 15 national switches, and executes real-time AML checks, sanctions screening, and fraud prevention.
Mene said the next phase of PAPSS will be defined by adoption and transaction volume rather than infrastructure. “We must drive real transaction volumes through PAPSS. This Forum provides the platform to bridge business cases, demonstrate commercial value, and position PAPSS as the preferred solution for intra-African payments,” he added.
He called for a coalition of central banks, commercial banks, fintech innovators, and private-sector players to accelerate usage, describing PAPSS as the backbone of the modern payment ecosystem needed to scale African SMEs and build regional value chains.
In his keynote, PAPSS CEO Mike Ogbalu III traced Africa’s payment inefficiencies to the legacy of the 1884 Berlin Conference, which left the continent with borders and currencies that do not align with its trade realities.
“Africa’s 41 currencies do not speak to one another,” he said, noting that traders continue to navigate expensive foreign currency corridors for transactions between neighbouring states. Ogbalu argued that PAPSS represents a long-overdue correction to decades of economic fragmentation, enabling instant settlement, reduced costs, and a more predictable flow of trade.
Afreximbank’s Executive Vice-President for the Global Trade Bank, Heytham El Maayargi, said Africa still loses nearly $5 billion annually to third-currency routing. SMEs, he noted, continue to struggle with liquidity constraints and settlement delays that more integrated markets solved years ago.
El Maayargi highlighted the bank’s $3 billion settlement and liquidity facility, supported by its $45 billion balance sheet, as a critical pillar sustaining PAPSS operations.
He also unveiled upcoming innovations such as the PAPSS Card, which will allow travellers to make payments across Africa in their home currencies without FX spreads or reliance on foreign networks. In addition, Afreximbank announced a forthcoming Innovation Lab in Abuja, focused on AI-driven and trade-tech solutions built atop PAPSS.
Guest of Honour Prof. Pius Olanrewaju, President of the Chartered Institute of Bankers of Nigeria, argued that Africa cannot achieve monetary stability while 80% of intra-African payments rely on non-African currencies. He described PAPSS as the engine powering the AfCFTA’s promise of seamless trade, reduced costs, and financial sovereignty.
Other speakers echoed the sentiment, with AfCFTA’s Mene asking: “What concerns the dollar with two African countries trading with each other?”
Throughout the conference, the narrative remained unified: Africa is designing its own payment infrastructure rooted in its economic realities, not inherited systems. PAPSS was presented as the operational backbone that will convert AfCFTA policy commitments into real trade flows.
The event also witnessed strategic partnerships involving the PAPSS Card and firms such as Pay Altitude, Unify Payment, and Seanfix, alongside the announcement of the PAPSS CAWRY Awards scheduled for 2026 to honour outstanding ecosystem players.
For a continent long underserved by global payment networks, PAPSS represents more than technological infrastructure. It signals intent. Africa is not just joining the future of payments — it is shaping it.
SOURCE: Tribune