At the recent World Bank African Caucus Meeting in Washington, D.C., Finance Minister Dr. Mohammed Amin Adam urged the World Bank to accelerate its support for a continent-wide payment system aimed at enhancing Africa’s cross-border trade within its $3 trillion economy.
Stressing the need for financial modernization, Dr. Adam argued that a unified digital payment system could significantly boost economic integration, creating a smoother, more efficient trade environment.
He emphasized that Africa’s fragmented payment landscape limits the continent’s trade potential. A unified framework, he noted, would reduce transactional obstacles and foster closer economic collaboration among African countries.
“The fragmentation of Africa’s payment systems remains one of the principal barriers to realizing the full potential of intra-continental trade,” Dr. Adam told the gathering, chaired by World Bank President Ajay Banga.
“We must move decisively to implement a unified digital payment architecture that serves all 54 African nations,” he added.
In light of the challenges facing cross-border payments in Africa despite the establishment of the African Continental Free Trade Area (AfCFTA), Finance Minister Dr. Mohammed Amin Adam has advocated for faster implementation of the Pan-African Payment and Settlement System (PAPSS). This system aims to streamline payments across African nations by enabling real-time transactions in local currencies. Such a shift would reduce transaction costs and wait times while also minimizing dependence on foreign currencies and international banking networks, which currently complicate cross-border trade within Africa.
Dr. Adam noted that PAPSS could play a transformative role by simplifying transactions and fostering economic resilience, aligning with AfCFTA’s goals of enhanced intra-continental trade and economic cooperation.
Finance Minister Dr. Mohammed Amin Adam has laid out a comprehensive plan to revamp Africa’s financial systems, emphasizing three core pillars: significant investment in ICT infrastructure, leveraging advanced technologies like blockchain and AI, and utilizing blended finance to attract private investment. Speaking at the World Bank African Caucus Meeting, Dr. Adam underscored that these measures would address longstanding infrastructure gaps and strengthen the continent’s financial ecosystem to support the African Continental Free Trade Area (AfCFTA).
Dr. Adam also highlighted the importance of cybersecurity and regulatory alignment across African nations to protect digital payment systems. This is crucial as intra-African trade remains low at around 15%, in contrast to trade levels within Europe (70%) and Asia (60%). The AfCFTA aims to significantly increase this figure, potentially doubling it in the next decade, by overcoming infrastructure and financial bottlenecks.
Industry experts are optimistic, noting that a unified digital payment system could dramatically ease transactions, particularly benefiting small and medium-sized enterprises facing barriers in cross-border trade.
In closing, Dr. Adam urged the World Bank to collaborate with regional financial entities to assess current gaps and create a robust roadmap for an integrated payment infrastructure across the continent.
“We cannot build a digital payment system without ensuring its absolute security and reliability. This requires not just technological investment but also regulatory cooperation across borders,” he mentioned.