Africa’s businesses can cross borders more easily than their money can. That contradiction has quietly imposed a price on trade across the continent for decades.

A Nigerian company can find a customer in Ghana. A Kenyan manufacturer can sell to Rwanda. A Ghanaian trader can source goods from Côte d’Ivoire. A Kenyan airline can sell tickets in Nigeria. Yet when the time comes to pay, the transaction can take a financial route that neither buyer nor seller intended.

Banks and correspondent institutions sit between the two parties. Foreign-exchange charges accumulate. Settlement takes time. And businesses assume risks that have little to do with the goods or services they are actually trading.

For Africa, this is more than a banking inconvenience.

It is a trade problem.

The continent has spent years trying to remove physical and regulatory barriers to intra-African commerce. The African Continental Free Trade Area (AfCFTA) was created to bring African economies into a larger single market.

But beneath the tariffs, border procedures and transport challenges lies another barrier: how money moves.

The Pan-African Payment and Settlement System, better known as PAPSS, is one of Africa’s most ambitious attempts to address that problem.

Developed by the African Export-Import Bank (Afreximbank) in collaboration with the African Union and the AfCFTA Secretariat, PAPSS was officially launched in 2022 to facilitate instant cross-border payments in African currencies. Its infrastructure allows banks, payment service providers and fintechs to connect to a common continental payment rail.

And the infrastructure is growing.

As of July 2026, PAPSS says it connects 28 African countries, more than 190 commercial banks and fintechs, and 16 payment switches. Through extended-network partners, participants can reach more than 250 additional financial institutions.

That is a substantial expansion from 2025, when PAPSS reported 19 countries connected and 150 commercial banks onboarded during the first nine months of the year.

The system has also expanded through partnerships with existing national payment infrastructure. In February 2026, PAPSS partnered with Kenya’s PesaLink, connecting more than 80 PesaLink participants to more than 160 PAPSS commercial banks and fintechs, enabling 24/7 cross-border payments into Kenyan banks and mobile-money operators in local currencies.

But network size is only one measure.

The system’s expansion is also changing the competitive landscape among African banks. In Nigeria, FirstBank has integrated PAPSS into its digital banking platforms, including LIT, FirstMobile and FirstOnline, allowing eligible customers to initiate cross-border payments through channels they already use.

The harder question is whether African businesses are actually using PAPSS at meaningful scale and the evidence presents a more complicated picture. The numbers are growing, but the continental picture remains incomplete

Nigeria provides one of the clearest windows into actual usage.

In April 2025, the Central Bank of Nigeria (CBN)issued revised requirements for PAPSS transactions, encouraging banks, exporters, importers and individuals to make use of the system. The revised framework was intended to simplify the process while maintaining foreign-exchange monitoring and compliance requirements.

Afreximbank said the revised Nigerian framework would also allow commercial banks to source foreign exchange for PAPSS transactions through Nigeria’s foreign-exchange market.

That is important because PAPSS is not an independent monetary system floating above national economies.

The banks still need access to liquidity. The central banks still have regulatory responsibilities.

Foreign-exchange rules still matter.

According to the CBN’s 2025 Annual Report, transactions settled through PAPSS by Nigerian participants rose to 44,088 transactions worth $143.40 million in 2025, from 17,808 transactions valued at $29.23 million in 2024.

That represents an increase of approximately 148 per cent in transaction volume and about 391 per cent in value in one year. The number of Nigerian banks participating, however, fell slightly from 22 in 2024 to 20 in 2025. The figures matter because they replace a vague assertion that PAPSS usage in Nigeria is “modest” with evidence of substantial growth.

But they also raise another question: how large is PAPSS across Africa as a whole?

Here, the data becomes less straightforward. Afreximbank’s 2024 Annual Report said PAPSS transaction volume surged 900 per cent over 2023, attributing the increase to greater integration of banks, promotion of PAPSS through digital channels and rising awareness among participating countries. But a comparable, consolidated 2025 or 2026 continental transaction-volume and transaction-value figure is not publicly disclosed in the latest PAPSS material reviewed for this article.

That distinction is important.

PAPSS can say its network reaches 28 countries and more than 190 commercial banks and fintechs. But those figures do not mean all those institutions are processing transactions at the same intensity.

Connectivity is not the same as adoption. A bank can be connected without having a large volume of PAPSS transactions. A fintech can offer the service without customers choosing it. A central bank can support the infrastructure while companies continue using payment methods they already understand.

The more important measure, therefore, is not how many institutions are connected. It is whether businesses are choosing PAPSS repeatedly because it works better for them.

That evidence is beginning to emerge, but it is not yet sufficient to claim that PAPSS has transformed intra-African trade.

What PAPSS is actually trying to change

The idea behind PAPSS is relatively simple. If a Nigerian company wants to pay a business in Ghana, the transaction should not necessarily have to become Naira-to-dollar and then dollar-to-Cedi.

Instead, the Nigerian payer can initiate the transaction in naira while the Ghanaian recipient receives cedis, with the payment and settlement infrastructure handling the process between participating financial institutions.

PAPSS is designed to make the mechanics relatively simple. A customer gives a payment instruction to a participating bank or payment provider in the customer’s local currency. The instruction goes through PAPSS, and the beneficiary’s bank pays the beneficiary in the beneficiary’s local currency.

PAPSS says its instant-payment process can operate within about 120 seconds, while settlement among participating central banks is handled through a separate net-settlement process.

The customer does not have to wait for every individual transaction to be separately settled between central banks. PAPSS aggregates the obligations and settles the net positions.

For African commerce, this creates something that has been missing: a shared payment infrastructure that can sit above multiple national financial systems. It is similar in concept to building a common highway between roads that previously ended at national borders. But a highway only matters if vehicles actually use it.

PAPSS is not a war against the dollar

The language around “de-dollarisation” can make the development sound more dramatic than it actually is. PAPSS is not an African currency. It is not a reserve currency. And it does not attempt to displace the dollar from international finance. The dollar remains central to Africa’s external economic relationships. Oil and many other commodities are traded internationally in dollars.

African governments borrow extensively in foreign currencies. Businesses importing machinery, technology and other goods from outside Africa still need access to hard currencies.

So, the question is not whether Africa can stop using dollars. It cannot, at least not in any foreseeable future. The more practical question is why an African company trading with another African company should necessarily need a dollar to complete that transaction. That is the gap PAPSS is trying to fill.

PAPSS CEO Mike Ogbalu III has stressed this distinction. “Our aim is not to eliminate the dollar,” Ogbalu said in July 2025. “It’s about ensuring that when Africa trades with itself, it can use its own currencies.”

That is not the same as eliminating dollar dependence. It is reducing unnecessary dollar intermediation in intra-African trade.

Why the dollar became the bridge

The dollar occupies this role partly because Africa’s currencies are fragmented. There are more than 40 currencies on the continent, each operating under different monetary, fiscal and foreign-exchange conditions. Some have deep markets. Others do not. Some are freely convertible. Others face restrictions. Some can be hedged relatively easily. Others are difficult to trade outside their home markets.

For a bank, using the dollar as an intermediary can therefore be easier than finding a direct market between two African currencies. For a business, however, the convenience of the dollar can come at a price.

There can be two currency conversions instead of one. There can be correspondent-bank charges, compliance procedures at several points in the payment chain, delays and uncertainty over the exchange rate that will ultimately apply.

The International Monetary Fund has documented the problem in concrete terms. It cited the example of a $100 payment from Ghana to Nigeria in which the standard SWIFT charge was $35. For Ghana-Côte d’Ivoire transactions, the payment could involve two overseas banks because of the way correspondent relationships were structured. The IMF said transaction costs could reach 4 to 5 per cent in some cases.

For a large corporation, that may be manageable. For a small trader operating on a narrow margin, it can determine whether a transaction is worthwhile.

The $5 Billion question

The figure most frequently associated with PAPSS is $5 billion.

But what exactly does it mean? It is not $5 billion that PAPSS has already saved.

The original PAPSS/Afreximbank announcement in September 2021 said full implementation of the system was expected to save the continent more than $5 billion annually in payment transaction costs.

The IMF later cited the same estimate in discussing the cost of Africa’s fragmented currency and payment architecture.

Afreximbank and PAPSS again referred to the estimated $5 billion annual burden when the African Currency Marketplace was launched in July 2025, describing the cost as arising from fees, delays and opportunity costs associated with currency inconvertibility and the use of external currencies.

The figure should therefore be understood as an estimate of potential savings or existing transaction-related costs, not as an independently audited amount already saved by PAPSS.

That qualification matters.

It also points to a larger problem: Africa does not yet have a single, comprehensive public dataset showing precisely how much intra-African trade is currently settled in dollars, euros or other hard currencies.

The available evidence shows that external currencies remain important, but there is no reliable continent-wide percentage that can responsibly be presented as the current dollar share of intra-African trade.

Kenya Airways shows what the change looks like in practice. The strongest evidence that the local-currency experiment is moving beyond theory comes from companies operating across African borders.

Kenya Airways is one example.

The airline earns Nigerian naira from ticket sales in Nigeria but ultimately needs Kenyan shillings. Under the PAPSS African Currency Marketplace, PACM, the airline can exchange Nigerian naira directly for Kenyan shillings instead of routing the transaction through a third currency.

PAPSS says its pilot involved more than 80 African corporations trading across 12 currency pairs, with all transactions settled in local currencies. Kenya Airways was among the companies used to demonstrate the model.

Ogbalu had earlier explained the problem using the airline, saying Kenya Airways should be able to receive its Nigerian earnings in Kenyan shillings without having to worry about sourcing foreign currencies to complete the transaction. The advantage is obvious. The airline does not have to treat the dollar as the necessary bridge between the naira and the shilling.

But there is an important caveat.

There is no publicly disclosed Kenya Airways figure establishing exactly how much the company saved on a specific transaction, nor is there a published before-and-after transaction time for that corporate flow. So, the responsible conclusion is not that Kenya Airways saves a particular percentage. It is that the mechanism has changed: direct local-currency exchange can remove an additional currency conversion and the associated costs and risks.

Reinsurance provides another real test.

A second example comes from the insurance industry. PAPSS identifies ZEP-RE, the PTA Reinsurance Company, as one of the early corporate users of the African Currency Marketplace. The company is involved in cross-border reinsurance, a business in which premiums and claims can move between several African markets.

PAPSS says its currency marketplace is being used by such corporations to address the difficulty of moving funds across African currencies without relying on hard currencies. The case is significant because reinsurance transactions are not small informal payments. They involve sophisticated financial institutions operating across multiple jurisdictions.

If local-currency settlement can work for this category of business, it provides evidence that PAPSS is not merely a platform designed for small retail transfers. But the public evidence does not establish a specific cost saving for ZEP-RE. That limitation should be acknowledged rather than replaced with a promotional claim.

What the evidence establishes is that real African corporations are testing local-currency settlement. The question is whether the model can move from early adopters to the broader business community. The payment rail cannot solve the currency problem alone.

There is a danger in believing that if PAPSS can move money instantly, the currency problem disappears. It does not.

A payment system can move a currency. It cannot guarantee the currency’s value. It cannot create liquidity where none exists. And it cannot automatically make a illiquid currency convertible.That is why PAPSS has expanded beyond its original payment function.

The African Currency Marketplace, launched by PAPSS and Interstellar in 2025, is designed to allow African currencies to be exchanged directly without routing through a hard currency such as the dollar or euro. PAPSS describes it as a mechanism for creating a broader liquidity pool for African currencies and says more than 78 African corporations had been onboarded during the pilot phase. That is the second half of the equation.

PAPSS answers the question of how money moves. The currency marketplace attempts to address how African currencies can be exchanged. Both are necessary. A real business can still get trapped without liquidity.

The problem of liquidity is not theoretical.

The IMF documented the experience of Tanzanian agricultural company Kuza Africa, which sold avocado seedlings to Angola. The company encountered difficulties receiving payment because of limited availability of dollars for trade settlement. Its operations manager explained that the delays affected business decisions, including when the company could plant its avocado seedlings.

Its Angolan customer, FertiAngola, also faced problems arising from foreign-exchange shortages and delayed payments.

This example predates PAPSS’s current expansion, but it demonstrates the precise problem the system is intended to address.

The transaction can exist. The buyer can exist. The seller can exist. The goods can cross the border. But if the currency needed to settle the transaction is unavailable, the trade can still stall. That is why liquidity is perhaps the most important test of Africa’s local-currency ambitions.

Volatility can create another problem.

Even when a currency is available, its volatility can make businesses reluctant to hold it.

The IMF documented the experience of Ghana’s cedi, noting that it took roughly six cedis to buy a dollar in mid-2021, compared with about eight cedis a year later a depreciation of approximately 25 per cent.

For a business receiving payment in an African currency, the concern is obvious. If the currency depreciates significantly before the company converts it or uses it to pay another obligation, the advantage of local-currency settlement can be weakened. That is why local-currency settlement requires more than technology.It requires credible monetary policy, deeper foreign-exchange markets and instruments that allow businesses to manage currency risk.

Where currency swaps come in

Currency swaps provide another tool, although they should not be confused with PAPSS. The Nigeria-China currency swap, for instance, is not an intra-African arrangement.

Nigeria and China renewed their bilateral currency-swap agreement in December 2024, with a value of 15 billion yuan and a three-year validity period. The arrangement is designed to support bilateral trade and investment and provide liquidity in the two currencies.

Its importance to this discussion is illustrative rather than direct. It demonstrates how two countries can create a mechanism that allows their currencies to support bilateral trade without every transaction having to rely on the dollar as the intermediary.

PAPSS seeks to take the principle much further. Instead of a bilateral arrangement between two countries, it is building a continental payment infrastructure through which African banks and payment providers can connect.

Currency swaps can therefore complement local-currency payment systems, but neither can eliminate the need for sound economic management. Central banks remain critical. The success of PAPSS ultimately depends on institutions beyond PAPSS itself.

Central banks regulate the monetary environment in which the transactions take place. They oversee participating financial institutions, influence foreign-exchange policy, and play a central role in settlement arrangements.

South African Reserve Bank Governor Lesetja Kganyago has argued that improving African cross-border payments is fundamentally about making trade easier. His position shifts the debate away from geopolitics. The issue is not necessarily whether Africa wants to confront the United States or the dollar. It is whether African countries can make it easier for their own businesses to trade with each other. The expansion into Central Africa demonstrates the importance of central-bank participation.

In July 2026, the Bank of Central African States, BEAC, joined PAPSS, bringing the system’s announced network reach to 28 African countries. PAPSS says BEAC’s participation connects the CEMAC region with the rest of the network. But this should not be interpreted as meaning that every bank in all six CEMAC countries is already operating at full commercial scale through PAPSS. The move is better understood as a major institutional gateway that still requires wider bank-level rollout.

The February 2026 partnership with Kenya’s PesaLink provides another example. PAPSS said more than 80 PesaLink participants would be connected to more than 160 PAPSS commercial banks and fintechs, enabling 24/7 cross-border payments into Kenyan banks and mobile-money operators in local currencies. That is how the system’s expansion will ultimately be measured, not simply by the number of countries signing agreements, but by whether banks, fintechs and businesses actually use the infrastructure.

Nigeria shows both the opportunity and the unfinished work

Nigeria’s experience is instructive. The country’s 2025 PAPSS transaction figures demonstrate significant growth. But the first half of 2025 had already shown that usage can fluctuate.

The CBN’s financial stability data for the period ending June 2025 showed Nigerian PAPSS participants processed 3,246 transactions worth N5.6 billion, down from 4,600 transactions worth N11.97 billion in the first half of the previous year.

Then the full-year 2025 figures showed a dramatic increase, with 44,088 transactions worth $143.40 million. The lesson is that PAPSS adoption is not a straight upward line. Businesses respond to exchange rates, liquidity, regulations, awareness, costs, and the availability of suitable trading corridors.

Nigeria also took steps in 2025 to make PAPSS transactions easier by streamlining documentation requirements. Under the CBN’s revised requirements, basic KYC and anti-money-laundering documentation could be used for PAPSS transactions below specified monthly thresholds, including $2,000 for individuals and $5,000 for corporates.

That illustrates another barrier: regulation can either accelerate adoption or slow it down.

Africa still needs the Dollar.

The dollar’s position should therefore not be downplayed. Even a successful PAPSS will not change the fact that Africa remains deeply integrated into the global dollar economy.

A Nigerian manufacturer importing machinery from Asia may still need dollars. An African oil producer selling crude on the international market may still receive dollars. A government servicing dollar-denominated debt will still require dollars. A foreign investor assessing an African asset may still calculate returns in dollars.

Local-currency settlement addresses a different layer of the economy. It deals primarily with transactions between African economies. That means Africa can simultaneously become less dependent on the dollar for intra-African trade and remain heavily dependent on it for external trade.

There is no contradiction.  The two systems can coexist. What must change? For local-currency settlement to become a mainstream feature of African trade, five things are particularly important.

Liquidity. African currencies need deeper markets with enough buyers and sellers. Convertibility. Businesses must be able to convert the money they receive when they need to.

Stability. Exchange-rate volatility must become manageable, either through stronger macroeconomic policies or accessible hedging instruments.

Interoperability. Banks, fintechs, mobile-money operators and national payment switches must connect seamlessly.

Trust. Businesses must know what a transaction costs, how quickly it will settle and what exchange rate they will receive.

There is also a sixth requirement that is less technical but perhaps more important: African trade itself must grow. PAPSS can make trade easier. It cannot manufacture demand for African products. If AfCFTA succeeds in increasing the movement of goods and services across borders, the demand for efficient cross-border payment infrastructure will naturally increase.  That is where the two projects meet.

The real test is business adoption.

Ultimately, PAPSS will not be judged by speeches at financial summits. It will be judged by traders, manufacturers, exporters, airlines, banks, fintechs and small businesses trying to get paid.  The numbers show that the infrastructure is expanding.

The CBN figures show that Nigerian transaction activity grew sharply in 2025. The network has reached 28 countries, more than 190 commercial banks and fintechs, and 16 switches. Kenya’s PesaLink is connected. BEAC has joined.

Kenya Airways and reinsurance companies have tested local-currency settlement. The African Currency Marketplace has been introduced. But pilot participation is not the same as mass adoption. The real test is whether businesses continue using the system when there is no conference, pilot programme or institutional encouragement.

Will they use it because it is cheaper? Because it is faster? Because it reduces their exposure to scarce dollars? Or will they return to traditional banking channels because the local currencies involved are too volatile or difficult to convert?   The answers will determine PAPSS’s future.

A quieter form of de-dollarisation: Africa’s financial transformation is unlikely to arrive as a dramatic announcement that the dollar has been replaced. It will happen transaction by transaction. A Nigerian company pays a Ghanaian supplier without sourcing dollars. A Kenyan airline converts revenue earned in Nigeria directly into shillings. A business receives payment through a local instant-payment network instead of waiting for several correspondent banks.

A trader discovers that the cost of doing business across an African border has fallen enough to make a previously unattractive market worthwhile. These are small events individually. Together, they can change the structure of trade. PAPSS therefore deserves attention not because it will destroy the dollar. It will not. Its significance lies in something more practical: it can reduce the number of times African businesses need the dollar simply to trade with one another. That distinction may eventually prove more important than the rhetoric surrounding de-dollarisation.

Africa is not necessarily choosing between the dollar and its own currencies. It is trying to build a system in which it has a choice. The infrastructure is being built. PAPSS is expanding. Domestic payment systems are beginning to connect across borders. Currency-market initiatives are attempting to tackle the liquidity problem. Central banks are being drawn deeper into continental financial integration. But the hardest work remains.

The continent must make its currencies sufficiently liquid, sufficiently convertible, and sufficiently trusted for businesses to use them without hesitation.

Until that happens, the dollar will remain the comfortable bridge. But if Africa succeeds in building functioning financial bridges between its own currencies, the dollar may gradually become what it should have been all along in many intra-African transactions: an option, not a necessity.