Africa must overhaul its cross-border payment systems to unlock the full potential of its $2.8 trillion single market under the African Continental Free Trade Area (AfCFTA), the Bank of Ghana said on Wednesday, warning that high transaction costs and slow settlement times continue to constrain intra-African trade.
Speaking on behalf of Governor Johnson Pandit Asiama at the African Prosperity Dialogue in Accra, Second Deputy Governor, Matilda Asante-Asiedu said trade agreements alone would not deliver integration without efficient mechanisms for transferring value across borders.
“Trade agreements alone do not create trade. Payments make trade possible,” she said, describing payment infrastructure as a core pillar of economic integration and financial stability across the continent.
Transaction costs for intra-African payments remain between 7% and 10%, compared with a global average of about 3%, while settlement times can take days or weeks, the Bank said. More than 80% of payments between African countries are routed through correspondent banks outside the continent, largely in foreign currencies, costing Africa an estimated $5.3 billion annually and exposing economies to exchange rate risks.
AfCFTA brings together a market of over 1.5 billion people with a combined gross domestic product of about $2.8 trillion. The Bank said intra-African trade could double in the medium term if payment systems are modernised to match the scale of the agreement.
Ghana is promoting the Pan-African Payment and Settlement System (PAPSS), which enables cross-border transactions in local currencies and aims to reduce reliance on foreign banking networks. The central bank said its long-term goal is for African trade to be increasingly settled through African infrastructure and institutions.
The Bank of Ghana also highlighted a fintech passporting initiative with Rwanda aimed at easing cross-border licensing, and an Africa-focused digital public infrastructure programme testing interoperability and future cross-border digital currency arrangements. Ghana’s recently passed Virtual Asset Service Providers law is intended to regulate emerging digital payment channels while strengthening consumer protection, it added.
High payment costs disproportionately affect small businesses, women traders and young entrepreneurs, who form the backbone of Africa’s informal and digital economies, the Bank said, calling for harmonised regulatory standards, expanded cross-border mobile money, and stronger cybersecurity frameworks.
African policymakers are increasingly shifting focus from trade policy to payment architecture as a key enabler of integration, with central banks taking a leading role in building interoperable digital finance systems across the continent.