June 2025
Against the backdrop of growing volatility in global markets and mounting geopolitical fragmentation, African countries are moving from statements to institutional practice of de-dollarisation. At the center of attention is the Pan-African Payment and Settlement System (PAPSS), which enables cross-border settlements in national currencies without routing transactions through foreign correspondent banks.
PAPSS was officially launched in January 2022 with the support of the African Union and the African Export-Import Bank (Afreximbank). As of mid-2025, the system is integrated with the central banks of 15 countries and more than 150 commercial banks. It is the first full-fledged regional attempt to create sovereign payment infrastructure on the continent.
Lower Costs and Currency Risks
According to Afreximbank, before PAPSS was introduced, about 80 % of all intra-regional settlements between African countries were carried out through the US dollar, resulting in high costs—ranging from 10 % to 30 % of the transaction value. Within PAPSS, cross-border transfer fees have been reduced to 1 %, which could bring aggregate savings of more than 5 billion dollars per year.
The system supports settlements in participants’ national currencies, with conversion executed inside the payment platform via the involvement of central banks and settlement agents. This simplifies operations and reduces dependence on volatile currency pairs.
Geopolitical Context and the US Response
Interest in PAPSS intensified after warnings by several US politicians, including former president Donald Trump, about possible restrictions on countries and companies abandoning the US dollar in international settlements. Although no official sanctions have been imposed, Africa perceived this as a signal to bolster financial sovereignty.
It is important to note that PAPSS is not declared as a tool of de-dollarisation; officially it is positioned as a platform to cut costs and speed up intra-regional trade. Nevertheless, its practical significance aligns with the broader trend in BRICS and Southeast Asian countries toward reducing the dollar’s role in cross-border transactions.
Support from International Institutions
The World Bank and the International Finance Corporation (IFC) are expanding lending programs in African national currencies, lowering currency risks and strengthening the resilience of the financial architecture. Within the G20, discussions are under way on recognizing PAPSS as a regional link in the global payment system.
The platform already supports settlements in more than ten currencies, including the Nigerian naira, the CFA franc, the Kenyan shilling, and the Ghanaian cedi. In the near term, the South African rand is slated to be added, along with integration with national digital ID systems to enhance the convenience of electronic transactions.
Implications for External Partners
For Russia, China, Turkey, and the Gulf states, PAPSS’s development opens alternative settlement channels—-including in rubles and yuan—-bypassing the dollar and SWIFT. Over the long run, technical integration of PAPSS with Russia’s SPFS and China’s CIPS is possible, laying the groundwork for a broader Eurasian-African settlement infrastructure.
However, practical realisation of these opportunities requires
Moreover, in an environment where financial processes are increasingly politicised, active participation in alternative settlement systems may trigger counter-measures from Western countries.
Conclusion
PAPSS is an important step toward creating a financially independent Africa capable of establishing internal payment mechanisms without intermediaries. With limited access to global clearing networks and the growing role of southern economies, such platforms are becoming not merely tools of regional integration but key nodes of the emerging world financial architecture.
Against the backdrop of growing volatility in global markets and mounting geopolitical fragmentation, African countries are moving from statements to institutional practice of de-dollarisation. At the center of attention is the Pan-African Payment and Settlement System (PAPSS), which enables cross-border settlements in national currencies without routing transactions through foreign correspondent banks.
PAPSS was officially launched in January 2022 with the support of the African Union and the African Export-Import Bank (Afreximbank). As of mid-2025, the system is integrated with the central banks of 15 countries and more than 150 commercial banks. It is the first full-fledged regional attempt to create sovereign payment infrastructure on the continent.
Lower Costs and Currency Risks
According to Afreximbank, before PAPSS was introduced, about 80 % of all intra-regional settlements between African countries were carried out through the US dollar, resulting in high costs—ranging from 10 % to 30 % of the transaction value. Within PAPSS, cross-border transfer fees have been reduced to 1 %, which could bring aggregate savings of more than 5 billion dollars per year.
The system supports settlements in participants’ national currencies, with conversion executed inside the payment platform via the involvement of central banks and settlement agents. This simplifies operations and reduces dependence on volatile currency pairs.
Geopolitical Context and the US Response
Interest in PAPSS intensified after warnings by several US politicians, including former president Donald Trump, about possible restrictions on countries and companies abandoning the US dollar in international settlements. Although no official sanctions have been imposed, Africa perceived this as a signal to bolster financial sovereignty.
It is important to note that PAPSS is not declared as a tool of de-dollarisation; officially it is positioned as a platform to cut costs and speed up intra-regional trade. Nevertheless, its practical significance aligns with the broader trend in BRICS and Southeast Asian countries toward reducing the dollar’s role in cross-border transactions.
Support from International Institutions
The World Bank and the International Finance Corporation (IFC) are expanding lending programs in African national currencies, lowering currency risks and strengthening the resilience of the financial architecture. Within the G20, discussions are under way on recognizing PAPSS as a regional link in the global payment system.
The platform already supports settlements in more than ten currencies, including the Nigerian naira, the CFA franc, the Kenyan shilling, and the Ghanaian cedi. In the near term, the South African rand is slated to be added, along with integration with national digital ID systems to enhance the convenience of electronic transactions.
Implications for External Partners
For Russia, China, Turkey, and the Gulf states, PAPSS’s development opens alternative settlement channels—-including in rubles and yuan—-bypassing the dollar and SWIFT. Over the long run, technical integration of PAPSS with Russia’s SPFS and China’s CIPS is possible, laying the groundwork for a broader Eurasian-African settlement infrastructure.
However, practical realisation of these opportunities requires
- close cooperation with African central banks;
- adaptation of regulatory norms;
- creation of mechanisms for mutual recognition of settlement centers.
Moreover, in an environment where financial processes are increasingly politicised, active participation in alternative settlement systems may trigger counter-measures from Western countries.
Conclusion
PAPSS is an important step toward creating a financially independent Africa capable of establishing internal payment mechanisms without intermediaries. With limited access to global clearing networks and the growing role of southern economies, such platforms are becoming not merely tools of regional integration but key nodes of the emerging world financial architecture.
