The Pan-African Payment & Settlement System (PAPSS) is set to introduce an African Currency Marketplace by the end of 2025.

This initiative, backed by 15 African central banks and linked to 150 commercial banks, aims to enhance cross-border trade by enabling direct exchanges of local currencies.

According to PAPSS CEO Mike Ogbalu, the platform will eliminate the need to convert through third-party currencies like the U.S. dollar, which has long been a barrier in Africa’s foreign exchange (FX) markets.

Addressing Africa’s Currency Challenges

Africa’s FX markets are known for their low liquidity, with most trading concentrated in South Africa and Nigeria. Businesses that operate across borders often face hurdles when trying to exchange African currencies, as the process typically involves converting to U.S. dollars,a costly and time-consuming step.

The new marketplace will allow direct currency swaps. For example, an Ethiopian airline selling tickets in Nigerian Naira could seamlessly exchange its revenue with a Nigerian company operating in Ethiopia.

Ogbalu explained, “Our system will intelligently match them, allowing party A to receive Naira in Nigeria while party B gets Birr in Ethiopia—without any third-party currency involvement.”

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Solving Revenue Repatriation Issues

One of the most significant challenges for African businesses is the repatriation of revenue due to dollar shortages in volatile regions.

Companies operating in countries like South Sudan and the Central African Republic often face severe delays or must write off revenue due to currency fluctuations.

PAPSS aims to solve this issue by providing a direct settlement system, allowing businesses to retain value and access their funds more efficiently.

Ogbalu described the platform as “transformational,” offering a lifeline to businesses struggling with currency volatility and liquidity constraints.

Currency Swaps and Precedents

Africa has previously seen successful currency swap arrangements. In 2023, the central banks of Ethiopia and Nigeria undertook a $100 million swap to facilitate revenue exchange between Ethiopian Airlines and Dangote Cement.

This arrangement addressed foreign exchange shortages that were hindering profit repatriation. Similarly, in 2024, Ethiopia and China formalized a currency swap agreement to enable direct trade between the Ethiopian Birr and the Chinese Yuan, enhancing trade flexibility and reducing reliance on the U.S. dollar.

The African Currency Marketplace will formalize and scale up these bilateral swaps across the continent, fostering greater financial integration and intra-African trade.

Boosting Intra-African Trade

PAPSS, established by the African Export-Import Bank (Afreximbank) in collaboration with the African Union Commission (AUC) and the African Continental Free Trade Area (AfCFTA) Secretariat, has been at the forefront of promoting financial independence within Africa.

Since its 2022 launch, PAPSS has facilitated faster and cheaper cross-border transactions while reducing the continent’s reliance on external payment systems.

Currently, more than 80% of Africa’s cross-border payments are processed through offshore channels, costing businesses around $5 billion annually in fees.

Recent milestones reflect the system’s growing reach. In February 2025, KCB Group in Kenya became the first East African bank to initiate transactions on the platform.

Additionally, 115 commercial banks, including Standard Bank and four of Africa’s largest financial institutions, along with 13 central banks and 10 switching-service providers, have joined PAPSS.

The Central Bank of Egypt’s integration in December 2024 further highlights the platform’s momentum.

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The Road Ahead

The African Currency Marketplace represents a major leap forward in addressing Africa’s currency fragmentation.

By enabling direct currency swaps, PAPSS promises to enhance liquidity, reduce transaction costs, and provide businesses with a reliable solution to revenue repatriation challenges.

As African nations continue to implement market-driven currency reforms, the marketplace is poised to play a critical role in encouraging sustainable economic growth and financial independence across the continent.

With PAPSS driving innovation, the future of cross-border trade in Africa looks more connected and efficient than ever before.