President of Kenya, Dr William Samoei Ruto, has disclosed plans to work with President Nana Addo Dankwa Akufo-Addo to ensure that all financial institutions under the African Union (AU) are ratified.

The ratification of these financial institutions, he said, will build an ecosystem to support trade and investment in Africa.

Addressing a gathering at the Africa Trade House in Accra on Wednesday, April 3, 2024, Dr Ruto bemoaned the US$5 billion spent every year on foreign exchange while trading under the Africa Continental Free Trade Area.

He said, “I will be working with President Nana Akufo-Addo to ensure that all financial institutions under the AU are ratified so that we can build the necessary financial ecosystem to support trade, investment and business in our continent."

To address this gap, the Pan-African Payment & Settlement System (PAPSS) has been rolled out to ease the transfer of funds across Africa.

PAPSS, a financial market infrastructure for economic and financial integration of Africa will increase trade volume as the process is simplified and transactions are made instantly.

The introduction of the commercial bank settlement model has no transaction limits and the settlement is handled by banks.

This new settlement model offers commercial banks a window to open and fund their own settlement accounts at Afreximbank.

They can also manage their liquidity according to their banking needs.

Also, under PAPSS, most payments are made in local currency to boost trading activities on the continent.

As of June 2022, the PAPSS network consists of 8 central banks, 28 commercial banks and six switches.

It is expected to expand into the five regions of Africa before the end of 2023.

SA/MA