CIBN president: Africa loses $5bn annually to cross-border payment inefficiencies

Pius Olanrewaju, president and chairman of the council of the Chartered Institute of Bankers of Nigeria (CIBN), says Africa loses an estimated $5 billion annually to settlement inefficiencies associated with reliance on foreign currencies.

Olanrewaju spoke on Tuesday at the inaugural and official launch of the PAPSS Cowry conference on worldwide and regional payment in Lagos.

He said the event was more than the commencement of the forum, describing it as the birth of a “new era in African payments”.

The council president said for years, cross-border payments in Africa have been slow, expensive, and dependent on foreign currencies and intermediaries.

This, according to the professor, has hindered trade, discouraged investment, and created unnecessary obstacles.

“It runs contrary to the spirit and the aim of Africa’s continental free trade area, which envisions a truly interconnected and prosperous Africa. The urgency of our discourse today cannot be overstated,” Olanrewaju said.

“Africa loses an estimated $5 billion annually to settlement inefficiencies associated with reliance on non-African currencies.

“At the same time, intra-Africa trade remains at 18 percent, one of the lowest regional trade figures globally. That is what PAPSS is trying to address today.”

In 2022, the African Export-Import Bank (Afreximbank) launched the pan-African payment and settlement system (PAPSS), a financial market infrastructure, to enable cross-border payments in local currencies across different markets on the continent.

Further speaking at the event, the CIBN chairman said Africa cannot achieve monetary stability or a stable continental trade ecosystem with over 80 percent of intra-African payments being dependent on foreign currencies.

The council president warned that without a sovereign payment system, African trade will remain “externally private, externally settled, and externally constrained”.

“This is the moment for policymakers, bankers, and private sector leaders to rally around PAPSS as a continental public good for every one of us,” he said.

‘PAPSS COWRY PROVIDES PLATFORM TO FORGE NEW PARTNERSHIPS’

He hailed the collaboration between CIBN and PAPSS as “a landmark in the evolution of the Nigerian financial ecosystem.”

Olanrewaju said the partnership is not only improving operational efficiency but also setting new standards for collaboration, capacity building, and industry-wide impact.

“The PAPSS cowry provides a platform for us to set our own agenda, exchange ideas, and forge new partnerships that will drive African economic transformation for decades to come,” the chairman said.

“It is where policymakers, financial institutions, and fintechs, and global partners can come together to imagine and build a truly sovereign and interoperable African human system.”

Olanrewaju urged all stakeholders, financial institutions, fintechs, and development partners to seize the opportunity to collaborate, innovate, and lead — “not only for individual country but for the entire African continent”.