Central Bank of Kenya joins the African Payments and Settlement network

By becoming a member of the Pan African Payments and Settlement System (PAPSS), the Central Bank of Kenya allows businesses within its nation to conduct trade and financial transactions seamlessly with counterparts across Africa.

A growing network

CBK joins a growing list of other African monetary authorities that are already part of the PAPSS platform, including the Central Banks of Nigeria, Liberia, Guinea, Djibouti, Gambia, Bank of Sierra Leone, Reserve Bank of Zimbabwe, Bank of Zambia, and Bank of Ghana.

In Kenya, commercial banks already on the PAPSS network include UK-based Standard Chartered Bank of Kenya (SCBK), Togolese-headquartered Ecobank, and Kenyan-owned Regional giant KCB. Ecobank and KCB signed up to PAPSS in June 2023. By the end of 2025, all commercial banks in Africa are expected to sign with PAPSS. At the time of this announcement, 28 commercial banks have signed up.

PAPSS facilitates intra-Africa transactions in local currencies

One of the Ministries of Kenya said the PAPSS platform will enable Kenyan firms to trade with their peers from other African Member States using local currencies, a major boost for the African Continental Free Trade Area (AfCFTA).

The PAPSS platform was developed in collaboration with the African Export-Import Bank (Afrexim Bank). Its objective is to enhance trading under the Africa Continental Free Trade Area (AfCFTA). There is a deadline of 2024 upon which all African Central Banks are expected to onboard the PAPSS network.

With instant payment, participants no longer need to convert local currencies into hard currencies. Hence, one can send money through a bank in the PAPSS network and the recipient can withdraw in local currency. PAPSS was developed in collaboration with the African Export-Import Bank (Afrexim Bank). Its objective is to enhance trading under the Africa Continental Free Trade Area (AfCFTA).

More information about PAPSS

PAPSS, formally launched in January 2022 is a digital centralised payments and settlement system that allows firms in Africa to settle their intra-African trade transactions in their own currency, thus reducing the cost of trade transactions.

Previously, African companies and their local banks used correspondent banks – often outside of Africa – to settle payments between two African currencies in a third, external currency, usually Dollars or Euros. This created foreign exchange and liquidity requirements for individual African Central Banks.