Minister for Communication, Digital Technology and Innovations, Samuel Nartey George has stressed the need for African countries to consciously promote PAPSS (Pan-African Payments and Settlements System) over the globally acclaimed SWIFT as the channel for cross-border digital financial transactions on the continent.
He was speaking as a panellist during the Ministerial Fireside Session at the just-end AI Action Summit in Paris, France where he represented President John Mahama among heads of states, top executives from leading tech firms, researchers, NGOs, and representatives from multilateral organizations to discuss the future of artificial intelligence (AI) and its transformative potential for societies worldwide.
The summit, held February 10 – 11, 2025, was Sam George’s first official assignment as Minister and it focused on making a case for unified AI ecosystem on the African continent.
In his submission, Sam George stressed the need for African countries to focus on harnessing their collective strengths instead of each country focusing on building its individual strengths, saying that creating synergies gives African countries a better chance of growing faster.
He said one of the key areas of creating meaningful synergies is seamless cross-border payments through the PAPSS platform to drive intra-Africa trade within the context of the Africa Continental Free Trade Area (AfCFTA), the headquarters of which is in Ghana.
The Minister said it does not make sense that several banks across the continent are currently signed on to PAPSS and yet when customers want to transfer money from one African country to the other, the banks still promote SWIFT over PAPSS and a corresponding bank in New York benefits from that transfer without doing anything.
”Due to the sensitization about SWIFT, the bank staff tend to offer SWIFT to customers more often than they do for PAPSS,” he said.
According to him, using SWIFT compels financial service providers to peg the various currencies to the dollar and therefore convert the currencies into dollars before settling at the receiving end. This means the corresponding bank in New York will get paid in the process and the sender will end up paying way more than he would have paid if the dollar pegging was not part of the transaction. It also means money that could have remained on the continent for development, goes to a bank in New York.
”The next four years of my government will be used to drive this agenda strongly to ensure that the PAPSS is preferred over SWIFT for cross-border transfers in Africa because that is the only way a farmer in Kenya can sell tea to a shop in Ghana and get payment across the digital platform without us having to have our currencies exchanged from the cedi to the dollar and from the dollar to the shilling,” he said.
The Minister said this can be achieved on the back of shared comprehensive data sets, from which a financial data can be accessed to ensure the trust needed to drive trade on the digital platform.
He also noted that such a process also requires a device identity register, where SIM cards are locked to particular identifiable devices and to GPS locations to ensure that even if anyone tries to defraud the system, they can always be located no matter where they move to.
Sam George believes with such a system in place governments can for instant begin to provide funding for farmers during the planting season so that they will not miss that season, knowing very well that once those farmers can be identified and located via technology, they can be supported to take advantage of the planting season and can easily be traced to payback during the harvest season.
“By so doing we help a lot of farmers to avoid poverty because they will not miss the planting season due to lack of funds,” he argued. “Through technology we can also build a credit model for these farmers to monitor how what kind of credit they need and how much they are making so that we know how much to expect from them in terms of repayment.”
Regulatory Hurdles, Regulatory Harmonization
The Minister’s submissions about the dollarization of cross-border transfers in Africa is in line with earlier remarks by industry players over the matter. But all of the previous speakers pointed to a regulatory hurdle that needs to be crossed.
At the launch of the 2024 State of Inclusive Instant Payment Systems (SIIPS) in Africa Report in Accra, CEO of the Ghana Interbank Payments and Settlements Systems, Archie Hesse stated categorically that all the talk about seamless cross-border payments in Africa will not get anyway until central banks on the continent agree to cede some of their respective sovereignties in the interest of a meaningful integration.
He said PAPSS, for instance, will not be able to achieve its intended purpose if the central banks don’t make the sacrifices they need to make to strengthen PAPSS.
Also Read: Regulatory harmonization critical to cross-border payments in Africa – AfricaNenda
Senior Vice President, Markets at MTN Group, Ebenezer Twum Asante, said at the 2023 Africa Prosperity Dialogue that the bane of cross-border trade through digitalization is the “tyranny of sovereignty”, where African regulators are more interested in protecting their respective sovereignties over meaningful integration through digitalization.
At the 3i Africa Summit, CEO of Zeepay, Andy Takyi Appiah said the private sector has always been ready to integrate and drive trade on the continent through digitalization, but lack of regulatory harmonization across the continent has always been in the way.
He thinks regulation on the digital finance space should have a bottom-up approach, where innovators lead by doing self regulation through proper internal processes/good governance, then it moves to ecosystem regulation where there is a peer review process so that the regulator at the top can play mainly a supervisory role, because a top-bottom approach has the potential of stifling innovation.
Speaking of regulatory harmony, the Deputy CEO of AfricaNenda Foundation, Sabine Mensah said that having different currencies in Africa is a challenge but not one that can not be solved to enable seamless cross-border payments.
”It is just a matter of our regulators coming together to seriously discuss what sacrifices they need to make to enable the ecosystem for cross-border transactions in spite of the currency differences,” she said.
This month, Ghana and Rwanda are holding a meeting in Kigali to discuss how to integrate their payment systems to enable seamless digital transactions between the two countries through PAPSS without pegging their currencies exchange to the dollar.
Some critics have cast doubts on the move, largely because PAPSS itself has not been very visible and it is very difficult to extract any meaningful information from them. But the Ghana and Rwanda move is a clear indication some African countries are committed to making PAPSS work.
