Business Post Contributor
Cross-border securities transactions across African capital markets have received a significant boost as Nigerian Exchange Limited (NGX) and Pan African Payments Settlement System (PAPSS) signed a Memorandum of Understanding (MOU) to integrate cross-border securities payments system in the capital markets.
The MoU, signed in a virtual ceremony on Tuesday, February 28, saw attendance from notable individuals, including the President of Afreximbank, Professor Benedict Oramah; the Director-General of the Securities and Exchange Commission (SEC), Mr Lamido Yuguda; and Chairman of NGX, Mr Abubakar Mahmoud, among others.
The CEO of NGX, Mr Temi Popoola, while giving his remarks, said that integrating PAPSS into the cross-border capital market framework will fix issues with currency convertibility, reduce cost, shorten processing and settlement times and foster access to capital.
“We hope that the success of this partnership will inspire other African nations to integrate with PAPSS to enable other member countries to benefit from improved efficiency,” he said.
In his welcome remarks, the Chairman of the NGX stated that investors would enjoy a more efficient and cost-effective way of investing in African securities, thus promoting regional integration and boosting trade flows.
The CEO of PAPSS, Mr Mike Ogbalu III, on his part, said, “With the signing of this MOU with our strategic partner NGX, we expect more transactions to flow into our system, but we also expect more Central Banks to join the PAPSS infrastructure to extend the reach to millions more with the resultant positive impact on intra-African Trade.”
Mr Oramah, whilst giving his remarks, noted that PAPSS came about as a recognition of the need to integrate payments for goods and services in Africa amid the implementation of the African Continental Free Trade Agreement (AfCFTA).
“Just as we want to ensure smooth settlements for goods, capital market integration is also critical. This is why we collaborated with NGX to facilitate forging PAPSS into the cross-border securities trading framework,” he said.
Also speaking, Mr Yuguda stated that the signing of the agreement was a significant milestone in line with the revised capital market master plan, promising that, “SEC will support all initiatives to enhance the integrity and efficiency of the capital market.”
Expressing his optimism about the potential of the initiative, the Chairman of NGX Group, Mr Kwairanga, said the agreement will open up new market opportunities to capital market operators across the continent.
