Algeria has officially become a participant in the Pan-African Payment and Settlement System (PAPSS), marking a significant step toward deepening financial integration across the African continent. PAPSS, developed by the African Export-Import Bank (Afreximbank) in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat, is designed to simplify and accelerate cross-border transactions among African countries by enabling instant payments in local currencies.
Before PAPSS, most intra-African trade payments were routed through foreign correspondent banks, often in Europe or the U.S., which caused delays, added costs, and limited access for smaller businesses. PAPSS addresses these issues by allowing African businesses and financial institutions to transact directly, eliminating the need for third-party currencies like the U.S. dollar or euro. This reduces transaction times from several days to seconds, lowers costs, and enhances transparency.
Algeria’s entry into the system is expected to strengthen its role in African trade and finance, aligning with the country’s economic diversification strategy. The move supports AfCFTA’s broader goal of boosting intra-African trade, currently estimated at just 15% of the continent’s total trade volume, compared to over 60% in Europe. With PAPSS, Algerian businesses will gain easier access to African markets, while local banks can expand cross-border services without the operational burdens of multiple currency conversions.
The integration also has strategic implications for Algeria’s financial sector. By connecting to PAPSS, Algerian banks will be part of a unified payment infrastructure covering a growing number of African nations, enhancing interoperability and competitiveness. The system’s real-time settlement capability will support sectors like manufacturing, agriculture, and services, enabling smoother supply chain operations and faster payments for exporters and importers.
Experts see Algeria’s participation as a catalyst for broader adoption of PAPSS in North Africa, potentially encouraging neighboring countries to join. This regional uptake could accelerate AfCFTA’s objective of creating a single African market for goods and services, underpinned by efficient financial systems.
Afreximbank and PAPSS officials have welcomed Algeria’s decision, emphasizing that expanding membership is crucial for maximizing the platform’s benefits. As more nations sign on, PAPSS could transform Africa’s payment landscape, reduce dependency on non-African financial intermediaries, and foster a stronger, self-reliant continental economy.
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