Moving from the dollar

PAPSS, the Pan African Payments and Settlements System, naturally wants to attract attention and custom. But it doesn’t want to attract too much negative attention from Donald Trump, who has threated countries moving away from the dollar with additional tariffs.

"Our goal, contrary to what people might think, is not de-dollarisation," said Mike Ogbalu, chief executive of the Pan-African Payments and Settlements System, which allows parties to transact directly in local currencies, bypassing the dollar,” reports Reuters. For Mike Ogbalu and PAPSS, it’s about the cost. "If you look at African economies, you'll find that they struggle with availability for third-party global currencies to settle transactions," he said.

“That adds significantly to transaction costs that, along with other factors like poor transport infrastructure, have made trade in Africa 50% more expensive than the global average, according to the UN Trade and Development agency. It is also among the reasons so much of Africa's trade – 84%, according to a report by Mauritius-based MCB Group – is with external partners rather than between African nations.

‘The existing financial network that is largely dollar-based has essentially become less effective for Africa, and costlier’, said Daniel McDowell, a professor at Syracuse University in New York specialising in international finance.”