Kenyan President William Ruto recently made a call to action for African countries to initiate the process of moving away from the U.S. dollar and adopting a pan-African settlement system. During a forum attended by government and private sector officials, President Ruto highlighted the benefits of the Pan-African Payments and Settlement System (PAPSS), which would streamline trade and economic activities by providing a common payment infrastructure.
President Ruto emphasized that PAPSS would enable business people across Africa to concentrate on the seamless movement of goods and services, rather than being burdened by the complexities and uncertainties associated with relying on the U.S. dollar. To begin the transition away from the dollar, he proposed that African countries encourage their central banks and commercial banks to join PAPSS.
PAPSS, an alternative payment system, is supported by central banks throughout the African continent and has been developed by the African Export-Import Bank (Afreximbank) and the African Continental Free Trade Area (AFCFTA) Secretariat. The system aims to enhance intra-African trade and economic integration by providing a reliable and efficient platform for conducting transactions and settling payments within Africa.
By adopting PAPSS, African countries would not only reduce their dependence on the U.S. dollar but also promote economic autonomy and strengthen regional cooperation. The system would facilitate smoother trade operations and eliminate the need for foreign currency conversions, reducing transaction costs and improving efficiency.
President Ruto’s call for African nations to embrace PAPSS reflects a growing sentiment across the continent to assert greater control over financial systems and reduce reliance on external currencies. As African countries continue to pursue regional integration and explore opportunities for intra-African trade, initiatives like PAPSS offer a promising avenue for fostering economic development and self-sufficiency.