The Pan-African Payments and Settlement System (PAPSS) announced that it is gearing up to launch “The Africa Currency Marketplace”, an innovative currency exchange platform that will enable African businesses to trade directly using local currencies. The marketplace is expected to go live later this year, offering a sustainable solution to one of the continent’s most persistent trade bottlenecks—foreign exchange inefficiency.
A Homegrown Solution to a Continental Challenge
Africa’s cross-border trade has long been hampered by limited forex liquidity and overreliance on foreign currencies, particularly the U.S. dollar. Businesses seeking to convert one African currency into another often resort to a detour—securing dollars first before executing local trades. This cumbersome process has led to transaction delays, increased costs, and a ripple effect on the ease of doing business across the continent.
According to Mike Ogbalu, CEO of PAPSS, the Africa Currency Marketplace is designed to eliminate the need for such intermediary currencies. Instead, it will match parties looking to swap local currencies directly, all through an intelligent, market-driven system.
“The rates will be market-driven, and our system is able to do a matching based on the rates offered by the different participants in our ecosystem,” Ogbalu explained in a recent interview. “Our platform will facilitate seamless currency exchanges—like naira for birr—without involving a third-party currency.”
Tackling Forex Illiquidity and Stalled Trade
African businesses frequently encounter challenges repatriating funds due to dollar shortages or restrictive currency controls, particularly in fragile markets such as South Sudan and the Central African Republic. Companies have often had to take drastic steps like investing in physical assets to hedge against volatile currencies or executing complex bilateral swap agreements to unlock trapped funds.
A notable example occurred in 2023 when Dangote Cement and Ethiopian Airlines orchestrated a $100 million currency swap, helping each company access funds stuck across borders due to forex shortages in Nigeria and Ethiopia.
“These kinds of deals highlight the need for a regional platform that can ease liquidity constraints without depending on external currencies,” Ogbalu said. He believes that the new system will be “transformational” in unlocking intra-African trade potential.
Supporting the AfCFTA and Economic Integration
The African Continental Free Trade Area (AfCFTA) has made significant strides toward fostering seamless trade within Africa, but financial system inefficiencies remain a barrier to full implementation. By facilitating direct currency exchanges between businesses, the Africa Currency Marketplace is positioned to complement AfCFTA’s efforts, empowering SMEs and large corporations alike to transact more fluidly across borders.
To date, PAPSS has integrated with 150 commercial banks and 15 central banks across the continent, laying the groundwork for wide adoption of the new platform.
Alternatives Have Emerged, But Challenges Persist
While some fintech startups like Yellow Card have turned to cryptocurrencies to provide cross-border payment solutions—reportedly processing $3 billion in transactions across 30,000 African businesses in 2024—the use of digital assets still faces regulatory uncertainties in key markets such as Kenya.
The Africa Currency Marketplace aims to offer a regulated and secure alternative tailored to Africa’s unique economic environment, making it easier for businesses to move funds and complete transactions without exposure to currency shocks.
A New Era for African Trade
By reducing Africa’s dependence on external currencies and offering a streamlined mechanism for currency exchange, PAPSS hopes to reshape the continent’s financial landscape. The Africa Currency Marketplace is expected to fuel intra-African commerce, reduce transaction costs, and help businesses manage currency risk more effectively.
As Ogbalu concluded, “We believe this platform will accelerate regional trade and contribute to a more integrated African economy. This is just the beginning of a more connected, resilient, and self-sustaining African market.”
