The National Bank of Ethiopia (NBE) has officially joined the Pan-African Payment and Settlement System (PAPSS), marking a significant milestone in the country’s efforts to modernize its financial sector and strengthen economic integration with African markets.
The development, announced by PAPSS on Thursday, is expected to facilitate cross-border transactions, reduce payment costs, and enhance trade and investment opportunities between Ethiopia and other African countries.
PAPSS enables businesses and financial institutions across participating African countries to conduct transactions directly in local currencies, reducing dependence on the US dollar and eliminating the need for intermediary correspondent banks traditionally used to process international payments.
National Bank of Ethiopia Governor Eyob Tekalign welcomed the development, emphasizing that Ethiopia’s participation in PAPSS represents an important step toward modernizing the country’s financial system and strengthening its economic ties with the rest of Africa.
Launched in January 2022 with an initial network of 10 commercial banks, PAPSS has expanded significantly and now operates in more than 15 African countries, including Nigeria, Kenya, Zambia, Malawi, and Tunisia. The platform currently connects more than 150 commercial banks across the continent, although South Africa has yet to join the network.
The payment system also plays a key role in supporting the implementation of the African Continental Free Trade Area (AfCFTA) by facilitating more efficient, affordable, and accessible cross-border payments.
Ethiopia’s integration into PAPSS represents another step in the country’s ongoing financial sector reforms and broader efforts to enhance regional trade, promote financial connectivity, and deepen economic cooperation across Africa.
The move is expected to create new opportunities for Ethiopian businesses and financial institutions to participate more actively in intra-African trade while supporting the country's growing integration into the continental financial system.
Source: Reuters
