PAPSS announces plan to launch FX market in 2025  

The Pan-African Payments and Settlement System (PAPSS) has announced plans to launch a currency market for African currencies this year. This move aims to strengthen cross-border trade across the continent. 

The platform will be named “The Africa Currency Marketplace,”. According to Mike Ogbalu, CEO of PAPSS, it will enable traders to exchange currencies directly. It will eliminate the need for third-party intermediary currency like the USD. 

“Our system will intelligently match them, and then party A will get Naira in Nigeria, and party B will get birr in Ethiopia. The transaction just completes without any third-party currency being involved at all,” Ogbalu told Reuters. 

He added, “The rates will be market-driven, and our system is able to do a matching based on the rates offered by different participants in our ecosystem.“ 

Addressing Cross-Border Currency Challenges 

A major barrier to the adoption of the African Continental Free Trade Area (AfCFTA) has been the inefficiency of currency systems, which complicates seamless transactions. Many African businesses struggle with forex illiquidity, making it difficult to repatriate funds across borders. 

In 2023, Dangote Cement and Ethiopian Airlines had to execute a $100 million currency swap deal due to FX shortages. At the time, Ethiopian Airlines had $180 million trapped in Nigeria, while Dangote Cement had $300 million stuck in Ethiopia. 

While reforms in Nigeria, Egypt, and Ethiopia have helped ease forex constraints, challenges persist across the continent. This has led fintech companies like Yellow Card to step in, leveraging cryptocurrency for cross-border payments. Yellow Card reportedly supports over 30,000 businesses across Africa and processed transactions worth $3 billion in 2024. PAPSS has integrated with about 150 commercial banks and 15 central banks across Africa.   

The Africa Currency Marketplace aims to provide a sustainable solution for cross-border trade, reducing reliance on external currencies and fostering a more integrated African trade ecosystem.