President Ali, in his keynote address at the 31st Afreximbank Annual Meeting and the third edition of the AfriCaribbean Trade and Investment Forum disclosed, that Caricom will look at using the Pan-African Payment and Settlement System (PAPSS) to address the payment settlement issues when trading within the region. This move comes as several countries in the region have expressed their dissatisfaction with the current payment system
“As Chair of CARICOM, I have asked the Chair of the CSME, Prime Minister Mottley and she has agreed to convene a meeting with the Ministers of Finance and Governance next week so that we can take to the next heads of government with CARICOM, a proposal where we can use your system to implement a regional system for our payment settlement.”
PAPSS is a “cross border financial market infrastructure enabling payment transactions across Africa.” The payment system has been lauded for its simplicity, ease of use, and significant benefits for both users and African Markets. Its benefits to African Markets for trade purposes have been characterized by its ability to mitigate the demands for foreign exchange liquidity while also enhancing “financial inclusion opportunities and improved economic growth through intra- African Trade.”
Owners of small and medium-sized enterprises trading across Africa who use PAPSS benefit from a reduction in the cost of cross-border transactions.
Kevin Greenidge, who serves as the chair of the CARICOM group of central bank governors has disclosed that plans are already in motion for the implementation of the Caribbean version of PAPSS and governors of the various central banks in the region who form part of the CARICOM group of central bank governors have already given the go-ahead for the implementation of the Caribbean version of PAPSS.
Governor of the Central Bank of Bahamas, Mr. John Rolle in his welcome remarks advocated for the replication of PAPSS in the Caribbean region.
“A successful project in the Caribbean could keep us on pace to deliver on targets that are already being set for an international payment system that, even at the retail level, is more integrated, faster, and significantly cheaper for the average consumer. If we perfect the multilateral cross-border payment and settlements arrangements, it could also help us to conserve the use of precious international reserves, especially if we expand intra-regional trade.”
The successful implementation of the Caribbean version of PAPSS across the region could see entrepreneurs, businesses, and Caribbean markets yield similar benefits as their African counterparts. Transaction costs incurred during intra-regional trade would be significantly reduced and trade would be conducted using the currency of the respective CARICOM countries and in the process mitigate the reliance on the U.S. dollar. Customers would also benefit from faster and hassle-free transactions when paying for goods and services across the region.
The 31st Afreximbank Annual Meetings (AAM), currently held in Nassau Bahamas will conclude on June 15. The event which has attracted Heads of State, Senior Government, and other high-level officials from across the region is being held under the theme “Owning our Destiny: Economic Prosperity on the Platform of Global Africa” and aims to enhance linkages and trade between Africa and the Caribbean.