Nigerian Exchange Ltd. (NGX) and Pan African Payments Settlement System (PAPSS) on Tuesday signed a Memorandum of Understanding (MoU), to integrate the payments system that would boost cross-border securities transactions across African capital markets.
The News Agency of Nigeria (NAN) reports that the MoU was signed in a virtual ceremony.
Mr Temi Popoola, Chief Executive Officer, NGX, while giving his remarks, said that integrating PAPSS into the cross-border capital market framework would fix issues with currency convertibility.
Popoola said that integration would also reduce cost, shorten processing and settlement times as well as foster access to capital.
“We hope that the success of this partnership will inspire other African nations to integrate with PAPSS to enable other member countries to benefit from improved efficiency,” he said.
In his welcome remarks, Chairman, NGX, Mr Abubakar Mahmoud, said that investors would enjoy a more efficient and cost-effective way of investing in African securities.
According to him, the development will promote regional integration and boost trade flows.
The CEO, PAPSS, Mr Mike Ogbalu said, the MoU would bring about more financial inclusion in the capital market operations.
Ogbalu said, “With the signing of this MoU with our strategic partner NGX, we expect more transactions to flow into our system.
“However, we also expect more central banks to join the PAPSS infrastructure to extend the reach to millions more with the resultant positive impact on intra-African Trade.”
President, African Export and Import Bank (Afreximbank), Prof. Benedict Oramah, while giving his remarks, noted that PAPSS came about as a recognition of the need to integrate payments for goods and services in Africa.
Oramah said that the initiative coming on board amid the implementation of the African Continental Free Trade Agreement (AfCFTA) was a welcome development.
“Just as we want to ensure smooth settlements for goods, capital market integration is also critical.
This is why we collaborated with NGX to facilitate forging PAPSS into the cross-border securities trading framework,” he said.
Also, the Director-General, Security and Exchange Commission (SEC), Mr Lamido Yuguda, said that the signing of the agreement was a significant milestone in line with the revised Capital Market Masterplan.
Yuguda said, “SEC will support all initiatives to enhance the integrity and efficiency of the capital market.”
Expressing his optimism about the potential of the initiative, the Chairman, Nigerian Exchange Group (NGX Group), Alhaji Umar Kwairanga, said the agreement would open up new market opportunities to capital market operators across the continent.
Mr Oscar Onyema, Group Chief Executive Officer, NGX Group, said the initiative came at the right time when Africa wants to accelerate the implementation of AfCFTA.
“It will stimulate the development of intra-African securities trading,” Onyema said.
Commending the initiative, the President, African Securities Exchange Association (ASEA), Mr Thalepo Tsheole, called on stakeholders to come together and ensure it is executed across Africa.
He emphasised that using the umbrella of ASEA, with nine exchanges and a market cap of 1.5 trillion dollars, PAPSS could be instrumental to the African Exchanges Linkage Project. (NAN)