The Securities and Exchange Commission (SEC) Nigeria has said that the implementation of the Pan-African Payment Settlement System (PAPSS) will boost intra-African trade and diversification within the capital market in the years ahead.
The Head, Office of the Chief Economist of the capital market regulatory commission, Dr. Okey Umeano, made this remark during the signing of a Memorandum of Understanding (MoU) by the SEC and the PAPSS’ officials as part of their joint efforts to promote cross-border payments across capital markets in Africa.
According to him, the signing of the pact formalized the commencement of the implementation of some ideas relating to improved efficiency of intra-African trade and the attendant positive implications for various economies in the content.
The investment expert maintained that the PAPSS was created initially for just the usual everyday trade and that the SEC had always wanted it for the capital market because the management believed that if the exchanges and the markets across the continent can be linked, it will create a bigger opportunity for everybody in the trading system.
Umeano said: “We have two projects the West African Capital Market Integration project and the African Exchanges Linkage project but the problem we have always had was how to settle, how do we make payments happen? If I want to buy a Ghanaian stock, do I have to change my naira to dollars and then from dollars back to cedi’s and all that.
“This is where all the problems we had but with PAPSS, we can make this trade more efficient and easier. I can trade in naira and whoever I am buying from in Ghana or wherever in Africa receives in the local currency so this is a good thing and we thank Afrexim Bank”, the economist added.
He also commended the NGX for taking the lead on the PAPSS initiative, saying that the MoU will allow the Exchange to work with the Ghana Stock Exchange and expresses optimism that other exchanges and other market players will key in to explore the opportunities in the PAPSS.
Umeano assured that regulators were in support of the initiative and were making efforts to harmonize regulations to support the laudable initiatives.
