The Central Bank of Egypt (CBE) has taken a significant step toward enhancing regional banking ties by joining the Pan-African Payment and Settlement System (PAPSS). This decision, approved in November 2024, aligns with Egypt’s strategy to deepen economic collaboration with African nations. PAPSS, developed by the African Export-Import Bank (Afreximbank), aims to streamline cross-border payments and trade transactions, significantly reducing costs and processing times.
Deputy Governor of the CBE, Rami Aboulnaga, described the move as a reflection of Egypt’s dedication to strengthening commercial and economic ties, particularly within Africa. He noted that PAPSS offers multiple benefits that are likely to encourage banks in Egypt and across Africa to participate in the system. Aboulnaga also emphasized the role of ongoing communication and collaboration between the CBE and African central banks in achieving this milestone.
PAPSS already boasts an extensive network, including 14 central banks from nations such as Nigeria, Ghana, Kenya, and Tunisia, along with over 50 commercial banks. With the CBE’s membership, Egypt now joins this growing network, underscoring its commitment to advancing financial integration on the continent. Several banks operating in Egypt have expressed interest in joining the system, signaling strong local support for this initiative.
Under the agreement, the CBE will oversee the participation of Egyptian banks in PAPSS, ensuring a seamless integration into the system. This move is expected to bolster intra-African trade by simplifying cross-border financial transactions and fostering stronger economic ties between Egypt and other African countries.
One of the key advantages of PAPSS is its net settlement mechanism, which facilitates financial transactions between participating nations without the need for foreign currencies. This feature is anticipated to alleviate pressure on foreign currency demand, creating a more efficient and cost-effective framework for cross-border trade.
By joining PAPSS, Egypt strengthens its role as a pivotal player in African economic collaboration, furthering its historical economic ties with the continent. This initiative not only supports Egypt’s regional economic objectives but also aligns with broader efforts to promote financial integration and trade growth across Africa.
The Central Bank of Egypt’s participation in PAPSS is a strategic move that highlights its commitment to fostering a unified African financial landscape. As more banks in Egypt and across Africa adopt this system, the benefits of streamlined transactions and enhanced economic cooperation are poised to reshape the future of trade within the region.