NGX, PAPSS Sign Memorandum of Understanding.

The Pan-African Payment and Settlement System (PAPSS) and the Nigerian Exchange Limited on Tuesday inked a Memorandum of Understanding for the ease of securities trading throughout the continent.

The African Export-Import Bank created PAPSS to enable payments for intra-African trades in local currencies utilizing central banks as settlement agents (Afreximbank),The goal of the Agreement is to make cross-border payments efficient and frictionless in Africa’s capital markets.

Alhaji Umaru Kwairanga, chairman of the NGX Group Ltd, stated that PAPSS will simplify payment and settlement of transactions under the terms of the MoU, beginning with cross-border transactions between the NGX and the Ghana Stock Exchange.

The African Exchange Limited Project’s continued efforts to integrate the African capital markets, according to him, will be made easier by the system.This is a locally developed response to the problem of fragmented and shallow capital markets and inefficient payment methods that have constrained the formation and development of capital markets in the continent, he said.

Abubakar Mahmood, chairman of the NGX, said in his welcome address at the virtual event that the MoU will aid in lowering transaction costs and risks related to trading in securities.Lamido Yuguda, the chairman of Nigeria’s Securities and Exchange Commission, called the occasion “important” and said it was in accordance with the commission’s stated strategic goals of promoting an integrated African capital market.

In his closing remarks, Professor Benedict Oramah, president of Afreximbank, mentioned that he first learned about the African Stock Exchanges Association’s aspirations to connect markets throughout the continent roughly six years ago.

In order to finance the settlement under the PAPSS arrangement, he said Afreximbank has put up a $3 billion facility, and he said that “financing will be available to support this project.”

Nine central banks and more than 50 commercial banks have joined the payments system, according to Mike Ogbalu, who provided an update on the progress of PAPSS.