By Adedapo Adesanya
Tunisia, through its central bank, Banque Centrale de Tunisie (BCT), has joined the Pan African Payment and Settlement System (PAPSS), making it the first North African country and 13th country to be boarded on the platform.
PAPSS, developed by the African Export-Import Bank (Afreximbank) in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat, facilitates real-time settlement of intra-African trade and payments, in African currencies, across the continent.
The platform unites central banks from across Africa and seeks to address the existing challenges faced by African businesses and individuals in accessing efficient and cost-effective cross-border payment services.
Launched two years ago, PAPSS has steadily expanded its footprint in Africa, now establishing itself in four regions. This network includes six in the West African Monetary Zone (WAMZ) region (Nigeria, Ghana, Guinea, Gambia, Liberia, and Sierra Leone), three in East Africa (Kenya, Rwanda, and Djibouti), and three in Southern Africa (Zimbabwe, Zambia, and Malawi). Tunisia is now its first North African member.
It is part of efforts to strengthen its commitment to promoting seamless cross-border payment services and enhancing financial integration across the African continent.
Tunisia joins PAPSS under the commercial bank settlement model that was introduced last year at the Afreximbank Annual Meetings in Accra, Ghana.
By adopting this model, BCT will preserve its foreign currency reserves and promote the use of the Tunisian Dinar for cross-border payments with the rest of Africa. This strategic move will undoubtedly enhance the value of its currency shortly and significantly decrease reliance on foreign currencies.
With this development, the Tunisian commercial banks can now commence their onboarding process onto the PAPSS system.
According to a statement from Afreximbank, BCT’s membership in PAPSS signifies the bank’s determination to foster economic growth and development within the country and the African region.
“This value-adding collaboration will allow Tunisian businesses and citizens to benefit from enhanced payment efficiency, reduced transaction costs, and more opportunities to trade and pay with other African countries,” the statement added.
Commenting on this landmark achievement, Mr. Marouane El Abassi, Governor of Tunisia’s central bank said that the inclusion of BCT in the PAPSS system demonstrates the country’s commitment to regional integration within the African continent at an economic and financial level.
He further stated that this initiative supports the Government’s efforts, led by the Ministry of Commerce, to integrate Tunisia into the AfCFTA.
In 2022, BCT also joined the inter-Arab payment and settlement System (BUNA), in continuation of its commitment to the country’s strategic priorities.
Additionally, Mr El Abassi called upon banks and the Post Office to join this efficient and cost-effective alternative mechanism to better support Tunisian economic operators in their transactions across the African continent.
He emphasised the importance of opening new commercial opportunities with Africa and expanding Tunisia’s presence in this promising market.
The Chief Executive Officer of PAPSS Mr Mike Ogbalu III emphasised the significance of Banque Centrale de Tunisie joining PAPSS.
“We are thrilled to welcome Banque Centrale de Tunisie as our thirteenth member and first Central Bank in North Africa. Their inclusion highlights the growing recognition of PAPSS’s transformative role in simplifying cross-border payments on the continent.
“As PAPSS continues to expand its membership base, we are encouraged by the commitment of central banks in facilitating trade and investment flows within Africa. This represents another step towards realizing our collective aspirations for an integrated African market.”
Also commenting on the signing, Mrs Ben Rejeb, Minister of Trade & Export Development emphasized the significance of joining a platform that can facilitate integration into the formal sector, enhance intra-African exports, and reduce transaction costs and processing times.
“As the Pan-African Payment and Settlement System (PAPSS) continues to attract more countries, we are witnessing a growing belief among Africans in their abilities and potential to drive the development of the continent through their initiatives.
“At Afreximbank, we have unwavering confidence that PAPSS will revolutionize the payment landscape within Africa, ultimately benefiting our people. We extend our heartfelt gratitude to Banque Centrale de Tunisie for their trust and decision to join the PAPSS network, as it signifies a significant step towards achieving our shared goals,” added Mr George Elombi, Executive Vice President of Afreximbank.
Afreximbank anticipates that more central banks will join the platform throughout the current year.
