President William Ruto of Kenya has recently entreated his African peers to initiate the move away from the U.S. dollar towards a pan-African settlement system. He highlighted how the Pan-African Payments and Settlement System (PAPSS) enables businesses to concentrate on goods and services trading.
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Kenyan President Ruto Advocates for Pan-African Settlement System to Offset Dependence on U.S. Dollar
President Ruto has put forth a plea to fellow African leaders to begin preparations to substitute the U.S. dollar with the Pan-African Payments and Settlement System (PAPSS). He emphasized that the PAPSS, inaugurated in January 2022, facilitates trading among African nations using their domestic currencies.
Speaking at a gathering of government and private sector representatives, the Kenyan leader proposed that the shift from the dollar could commence with the participation of central and commercial banks in the PAPSS.
According to a report from the East African, this alternative payment system, supported by African central banks, was created by the African Export-Import Bank (Afreximbank) and the African Continental Free Trade Area (AFCFTA) Secretariat.
President Ruto elucidated the need for African nations to move away from the dollar, expressing how they grapple with making payments for goods and services between countries due to currency disparities. He noted that these challenges stem from an imposed dollar environment.
Ruto further proposed that, once the settlement system is operational, the primary focus of businesses should be the movement of goods and services. In his view, the “complexity of currencies” should be handled by Afreximbank, a pan-African multilateral trade finance institution.
We invite you to share your thoughts on this development in the comments section below.
What is the Pan-African Payments and Settlement System (PAPSS)?
The Pan-African Payments and Settlement System (PAPSS) is an alternative payment solution that allows African countries to trade among themselves using their respective currencies. It was launched in January 2022 and developed by the African Export-Import Bank (Afreximbank) and the African Continental Free Trade Area (AFCFTA) Secretariat.
Why is Kenyan President William Ruto urging African nations to move away from the U.S. dollar?
President Ruto believes that reliance on the U.S. dollar is causing challenges for African countries, particularly when making payments for goods and services between different countries. These challenges are due to currency disparities and being subjected to a dollar environment. He argues that PAPSS can alleviate these issues.
How will the transition from the U.S. dollar to PAPSS work?
What does this move mean for businesses in Africa?
According to President Ruto, once the settlement system is operational, businesses should be able to focus on moving goods and services, leaving the complexity of currencies to be handled by Afreximbank, a pan-African multilateral trade finance institution.
Who developed PAPSS?
The Pan-African Payments and Settlement System was developed by the African Export-Import Bank (Afreximbank) and the African Continental Free Trade Area (AFCFTA) Secretariat.
4 comments
wow! Ruto’s thinking ahead. hope other African leaders follow suit…Its high time we had our own system, dont ya think?
Well done President Ruto! we need this, especially with the dollar fluctuations affecting our trade. so, I’m all for it!
is this real?? not sure how this would work, we can barely manage our own currencies. But if it works, then good for us, right?
hmmm…skeptical about this. On one hand, it’s great we’re seeking independence from the dollar. On the other hand, implementation sounds like a nightmare…