Central Africa Joins PAPSS, the Payment System That Cuts Out the Dollar

CENTRAL AFRICA · FINANCE

PAPSS Central Africa expansion is now a fact: the Bank of Central African States has plugged all six CEMAC countries into the continent’s instant-payment network, which reaches 28 nations and lets African businesses settle cross-border trade in their own currencies.

PAPSS Central Africa: what just happened

The Bank of Central African States, the central bank known by its French acronym BEAC, has joined the Pan-African Payment and Settlement System. The accession brings Cameroon, the Central African Republic, the Republic of Congo, Gabon, Equatorial Guinea and Chad into the network at once.

With the CEMAC bloc aboard, PAPSS now connects 28 African countries, linking more than 190 commercial banks and fintech companies through 16 payment switches, according to Businessday.

Why cross-border payments were broken

Until now, a business in Douala paying a supplier in Nairobi typically routed the money through correspondent banks in Europe or the United States, converting through dollars or euros along the way. Each hop added days and fees.

The absurdity was structural: two neighbouring economies settling their trade through banks an ocean away. Correspondent relationships have also been thinning for years as global banks de-risk, leaving smaller African lenders with fewer, costlier routes.

PAPSS removes the detour. Built by the African Export-Import Bank with the African Union and the AfCFTA Secretariat, it settles payments instantly, in the buyer’s and seller’s own currencies.

The system went live commercially in 2022 after a pilot in West Africa and has been adding central banks since. Afreximbank has estimated that routing intra-African payments at home could save the continent billions of dollars a year in transfer costs.

The 16 switches in the network are the national payment systems that once ended at each border. PAPSS wires them together, so a transfer clears in seconds rather than crawling through correspondent accounts abroad.

The central banker’s case

BEAC governor Yvon Sana Bangui, who also chairs the Association of African Central Banks, framed the accession as an integration play. “By joining PAPSS, BEAC is creating the conditions for faster, more affordable and more efficient cross-border payments between the CEMAC countries and Africa,” he said.

For the six economies of the CEMAC zone — some 60 million people, oil exporters mostly, with thin trade among themselves — cheaper rails lower one of the many barriers that keep intra-African commerce among the lowest of any world region.

The African Continental Free Trade Area is the demand side of the same equation. A single market for goods and services only works if a bakery in Libreville can pay a miller in Lagos without pricing the loaf in dollars first.

The CFA-franc bridge to watch

The more consequential step may be the pilot planned for later this year, linking BEAC with its West African sister, the BCEAO. The test would connect the two CFA-franc zones’ payment systems for the first time.

Seamless payments between Dakar and Douala would knit together two monetary unions that share a currency’s name but not its plumbing. It would also lay the groundwork for the wider financial integration the AfCFTA free-trade area assumes.

The quiet geopolitics of payment rails

Africa’s trade has long depended on payment infrastructure owned elsewhere, priced in other people’s currencies. Every expansion of PAPSS shifts a little of that dependence home.

The stakes are not merely technical. Cheaper settlement widens margins for small exporters, reduces demand for scarce dollars, and gives the continent a home-grown rail at a moment when the great powers are competing to wire Africa’s finance.

Readers in Latin America will recognise the move. It is the same logic behind Brazil and China settling trade in reais and yuan — not an attack on the dollar so much as a refusal to pay rent on it for neighbourhood commerce.

For the trader, the change is concrete: an invoice priced in CFA francs, paid from a Cameroonian account, arriving in a Kenyan one in shillings. The dollars stay where they are scarce — reserved for imports that truly need them.

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