Algeria Joins the Network of the Pan-African Payment and Settlement System (PAPSS)
Algeria has joined the Pan-African Payment and Settlement System (PAPSS) network, a significant move that is expected to enhance its economic ties and trade within Africa. This integration will enable seamless, near real-time payment settlements in African currencies, reducing reliance on foreign hard currencies and overcoming currency inconvertibility barriers that have historically constrained intra-African commerce.
PAPSS is a continent-wide payment infrastructure that allows direct exchange of African currencies without the need for conversion to hard currencies like the US dollar or euro, thus eliminating excessive foreign exchange costs and multi-week payment settlement delays. By joining PAPSS, Algeria taps into this system that creates a single liquidity pool and transforms intra-African trade with faster, cost-efficient, and more sovereign currency exchanges.
The Bank of Algeria's involvement in PAPSS signifies Algeria's commitment to financial integration and economic collaboration across Africa. This move aligns with Algeria's strategic economic diplomacy to deepen cooperation with African countries and may help it contend with regional rivals by increasing its economic influence within African trade networks.
The PAPSS network now includes 18 countries, spanning four African regions, following Algeria's addition. The extension of PAPSS to include Algeria is a significant milestone in the organization's mission to simplify cross-border payments and trade settlements on the continent.
The anticipated benefits of Algeria's participation in PAPSS include fostering stronger economic ties and increased trade between Algeria and other African nations. While the partnership's potential effects are not detailed beyond reduced costs and faster processing times, it is expected to reduce trade bottlenecks related to currency fragmentation, accelerate payments, and promote a more integrated African economy benefiting Algeria and its trading partners.
This partnership supports broader African continental goals of economic unity and sustainable growth through enhanced digital and financial infrastructure. As Algeria continues to assert its leadership in the Maghreb and beyond, its participation in PAPSS signifies a strategic step towards deepening economic ties within Africa and contributing to the continent's digital economic integration and improved trade connectivity.
[1] Source: African Development Bank Group, "Pan-African Payment and Settlement System (PAPSS)", accessed on 2022-03-28. [2] Source: Al Jazeera, "Algeria asserts regional leadership in the Maghreb", accessed on 2022-03-28. [3] Source: African Union, "Agenda 2063: The Africa We Want", accessed on 2022-03-28. [4] Source: United Nations Economic Commission for Africa, "Boosting Intra-African Trade: The Role of Digital Economy and e-Commerce", accessed on 2022-03-28.
- Algeria's involvement in the Pan-African Payment and Settlement System (PAPSS) not only aligns with its strategic economic diplomacy but also positions it as a key player in the fintech industry, aiming to foster increased business ties and finance-related advancements within Africa.
- By joining PAPSS, Algeria is expected to capitalize on the benefits of a unified fintech industry, including reduced foreign exchange costs, faster payment settlements, and a more integrated African economy, thereby bolstering its financial influence and better connecting with its trading partners.
){kind=link}