Africa Is Building A Payment System That Could Reduce Its Dependence On The Dollar

Africa's attempt to make it easier for businesses and individuals to pay each other across borders without first converting their money into dollars or euros is beginning to move from an institutional project into functioning financial infrastructure. The Pan African Payment and Settlement System, known as PAPSS, is expanding across the continent through central banks, commercial banks, national payment switches and fintech companies, creating a network through which a business in one African country can initiate a payment in its own currency while the recipient receives the money through the financial system of another African country. The significance is larger than the convenience of sending money more quickly. African countries trade in dozens of currencies, but cross border transactions have historically depended heavily on hard currencies, particularly the US dollar. A company buying goods from another African country may therefore have to convert its local currency into dollars before the receiving company ultimately converts those dollars into another African currency. PAPSS is attempting to reduce that dependence by building payment infrastructure specifically for transactions between African economies. The network is no longer confined to its original West African markets. Kenya and Rwanda launched PAPSS through KCB and Bank of Kigali in 2025, while Kenya significantly expanded its potential reach in February 2026 through the integration of PesaLink. PAPSS has also established connections involving Uganda, Zambia, Zimbabwe, Malawi and Djibouti, while Tanzania already has a direct participating bank and a wider incoming payments network. Central Africa took another major step in July 2026 when the Bank of Central African States, BEAC, joined PAPSS, creating a route toward integration of the six CEMAC economies. The result is the gradual construction of something Africa has lacked for decades: payment infrastructure designed around African trade itself. From Dollars To African Currencies Consider a Tanzanian company buying goods from a supplier elsewhere in Africa. In a traditional correspondent banking arrangement, the transaction can involve the Tanzanian company obtaining a hard currency, commonly dollars, before the payment moves through one or more correspondent banks. The recipient eventually receives the value through its domestic banking system, potentially after another currency conversion. This creates costs that have little to do with the goods being traded. Businesses can face foreign exchange spreads, correspondent banking charges, delays and the administrative burden associated with international payments. It also creates additional demand for dollars even where neither the buyer nor the seller is American and the goods themselves never enter the United States. PAPSS changes the architecture of the transaction. A customer initiates a cross border payment through a participating financial institution. PAPSS routes and validates the payment across its network, allowing the recipient to receive funds through its participating institution. PAPSS says its instant payment infrastructure operates continuously and can process payment instructions within a maximum of 120 seconds. Settlement is more complex than the customer facing transaction. PAPSS currently supports both central bank and commercial bank settlement models, with settlement generally occurring on the next business day. Under the central bank model, participating commercial banks fund accounts in local currency with their central bank, which acts as the national settlement agent. Under the commercial bank model, participating banks provide settlement liquidity themselves while the central bank retains regulatory oversight. The important economic point is that an African cross border payment no longer necessarily requires the customer to structure the transaction around the dollar. PAPSS Is Moving East The system began with a pilot involving the West African Monetary Zone economies of Nigeria, Ghana, Liberia, Guinea, Gambia and Sierra Leone. Its expansion into Eastern and Southern Africa is now changing the geographic character of the network. Kenya and Rwanda became important milestones when KCB and Bank of Kigali integrated PAPSS into their operations in February 2025. At that point PAPSS reported that its network had reached 15 central banks, more than 150 commercial banks and 14 payment switches. Kenya took another step in February 2026 when PAPSS partnered with PesaLink, the country's instant payment network. The arrangement was designed to allow PAPSS participants elsewhere in Africa to send payments into Kenyan banks and mobile money operators connected through PesaLink, providing considerably wider reach than connecting individual banks one at a time. PAPSS documentation also shows live or developing connections across Uganda, Zambia, Zimbabwe, Malawi and Djibouti. Its published payment information identifies KCB and Access Bank in Kenya, Bank of Kigali in Rwanda, Salaam Bank Uganda, National Bank of Malawi, Access Bank Zambia and banks in Djibouti among institutions reachable through parts of the network. Tanzania is also further along than a simple list of fully live consumer markets might suggest. PAPSS's June 2026 network coverage document identifies UBA as a participant able to send and receive in Tanzania, while an extended network makes an additional 34 banks and two fintechs reachable for incoming payments. This illustrates why PAPSS coverage cannot be described accurately using a simple list of countries that have either joined or not joined. A country can have a central bank connected, one participating commercial bank, an integrated national switch, incoming payment capability or full customer access. These are different levels of integration. Central Africa Is The Next Major Expansion One of the most consequential developments occurred in July 2026 when BEAC joined PAPSS. BEAC is the common central bank of the Central African Economic and Monetary Community, CEMAC, covering Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea and Gabon. The arrangement potentially connects an entire monetary union rather than requiring PAPSS to build its presence country by country. Because the six economies already share the CFA franc and a common central bank, BEAC provides a regional settlement architecture through which PAPSS can expand. However, joining the PAPSS network does not mean that every bank customer across the six countries can immediately make PAPSS payments. Commercial financial institutions still have to be integrated and services rolled out. This distinction between institutional connection and actual customer availability is essential when measuring PAPSS's progress. It is equally important not to confuse Republic of Congo with the Democratic Republic of Congo. Republic of Congo is a CEMAC member and therefore falls under the BEAC integration. DRC is not part of CEMAC and requires its own route into PAPSS. Ethiopia Could Make The Network Considerably More Important Expansion into Ethiopia would carry particular economic weight because payment systems become more valuable as large markets join them. Ethiopia has one of Africa's largest populations and is undergoing significant financial sector and foreign exchange reforms. The same principle applies to the continent's other large economies. PAPSS becomes substantially more economically useful when businesses can move money between major trading centres rather than simply when the number of participating countries increases. The appropriate measure of PAPSS's success therefore is not only how many flags can be placed on a map. It is how much African trade can actually be settled through the system, how many businesses can access it, how many currencies can be used, how much transaction cost is removed and how much settlement can occur without businesses first obtaining dollars or euros. PAPSS Does Not Eliminate The Dollar The system is sometimes described as part of Africa's de dollarisation agenda, but that description requires qualification. PAPSS does not abolish the dollar from African economies. African governments will continue requiring hard currency for external debt service, petroleum imports, machinery, pharmaceuticals, aircraft, technology and goods purchased outside the continent. Commodity contracts and international financial markets also remain heavily dollar denominated. Nor can payment infrastructure solve the underlying problem of weak African currencies. If a country has high inflation, persistent external deficits, inadequate foreign exchange reserves or declining confidence in its currency, connecting that currency to a continental payment network does not eliminate those macroeconomic weaknesses. What PAPSS can reduce is the unnecessary use of hard currencies as an intermediary in transactions where both sides of the trade are African. That is a narrower objective, but potentially a very large one. If a Kenyan company is purchasing goods from Ghana, or a Rwandan company is paying a supplier in Nigeria, there is little economic reason why the transaction should necessarily require both businesses to obtain dollars simply because the continent historically lacked infrastructure capable of efficiently connecting their domestic payment systems. The Bigger Question Is African Trade PAPSS ultimately matters because of the African Continental Free Trade Area. Removing tariffs and customs barriers can increase trade opportunities, but goods cannot move efficiently across a continental market if money remains expensive and difficult to move between the same countries. Payment infrastructure therefore belongs alongside roads, railways, ports, border posts and digital networks as part of the infrastructure required for African economic integration. PAPSS is designed to connect financial intermediaries rather than replace them. Commercial banks, central banks, fintech companies, payment service providers and national switches remain part of the system. Direct participating institutions maintain settlement relationships with central banks, while indirect participants can operate through sponsoring direct institutions. That architecture is important because Africa already has functioning domestic payment systems. The challenge is increasingly interoperability between them. Kenya's PesaLink integration demonstrates what this could eventually look like. Instead of PAPSS having to establish an isolated relationship with every financial institution, integration with domestic payment infrastructure can provide a bridge between an existing national network and the wider continental system. If that model spreads, PAPSS could increasingly become the layer connecting African payment systems rather than another payment network competing with them. Africa Is Slowly Building Its Own Financial Plumbing The development of PAPSS should therefore be measured less by announcements and more by usage. The numbers that matter now are transaction value, transaction volume, active banks, active currencies, participating businesses, payment costs, settlement times and the share of intra African payments that no longer require an intermediary hard currency. There are also significant gaps. Some countries have extensive banking connectivity while others remain at the institutional integration stage. Some markets can receive payments but have more limited outgoing functionality. Some central banks are connected while commercial banks are still being onboarded. The existence of a PAPSS relationship should therefore never be treated automatically as evidence that every individual or business in that country can use the service. But the direction is increasingly clear. For decades, Africa's ambition to trade more with itself has concentrated heavily on what crosses borders: trucks, containers, commodities, electricity and people. PAPSS addresses something less visible but equally fundamental: how the money crosses the border after the transaction takes place. If AfCFTA is intended to create an African market, PAPSS is attempting to build part of the financial plumbing beneath that market. Its success will not be determined by how many countries sign agreements, but by whether an African business can eventually sell to another African business, be paid quickly in African currencies and complete the transaction without automatically reaching for the dollar. Africa will not build a genuinely integrated market only by making it easier for goods to cross its borders. It must also make it easier for African money to cross them. FAQ What is PAPSS? The Pan African Payment and Settlement System is a cross border payments infrastructure developed by Afreximbank in collaboration with the AfCFTA Secretariat. It allows participating financial institutions to process payments between African markets through an integrated continental system. Can PAPSS payments be made in African currencies? Yes. PAPSS is designed to allow customers to initiate and receive qualifying cross border African payments through participating financial institutions while reducing the need for customers to obtain hard currencies solely to intermediate the transaction. How fast are PAPSS payments? PAPSS says its instant payment system operates 24 hours a day and can process cross border payment instructions within a maximum of 120 seconds. Settlement between participating financial institutions follows the applicable settlement model and can occur separately from the customer facing payment. Which East African countries are connected to PAPSS? PAPSS has established varying levels of connectivity across countries including Kenya, Rwanda, Uganda and Tanzania, while other markets are at different stages of integration. The precise status depends on whether the country's central bank, commercial banks or domestic payment switch is connected and whether outgoing and incoming customer payments are live. Is PAPSS replacing the US dollar in Africa? No. PAPSS does not replace the dollar as a reserve, trading or international financing currency. Its purpose is to reduce the need to use hard currencies unnecessarily as intermediaries in qualifying payments between African countries. How does PAPSS support AfCFTA? AfCFTA seeks to increase trade within Africa. PAPSS provides financial infrastructure intended to make payment for that trade faster and less dependent on multiple correspondent banking relationships and hard currency conversions.