PAPSS: GITFiC advocates for 1% transactional revenue for BoG, other central banks
The Ghana International Trade and Finance Conference (GITFiC) is advocating for a 1 percent transactional revenue for the Bank of Ghana (BoG) and its peers on the continent from total revenues accrued through the usage of the Pan-African Payment and Settlement System (PAPSS) during the operationlisation of the African Continental Free Trade Agreement (AfCFTA).
According to GITFiC, this will help sustain the interest of the various African central banks in the payment and settlement platform as well as guarantee its success.
The proposal by the Group, forms one of the key recommendations contained in the August edition of its monthly research reports.
PAPSS is a centralised payment and settlement infrastructure for intra-African trade and commerce payments developed by the African Export-Import Bank (Afreximbank) to facilitate payments and formalise some of the unrecorded trade due to the prevalence of informal cross-border trade in Africa.
According to Afreximbank, the project is being piloted across the West African Monetary Zone (WAMZ) and “will also provide an alternative to current high-cost and lengthy correspondent banking relationships to facilitate trade and other economic activities among African countries through a simple, low-cost and risk-controlled payment clearing and settlement system”.
Offering a rationale behind the research subject area, Chief Executive Officer at GITFiC, Selassie Kofi Ackom, stated that the rapid adoption of digital payment systems globally represents the biggest advancement toward financial inclusion in modern history, and one which Africa and AfCFTA must take full advantage of.
“Digital payment systems can make a great mark in the formal and informal trading sector if the requisite structures of regulation, trust and policy are put in place,” he said.
Other recommendations proposed by GIFTiC include the formulation of policies to regulate digital currencies by state parties; the need for governments to invest adequately in financial technology, and the rolling out of programmes to build institutional capacities for the continent’s largely informal trade sector.