Cross-Border Payment Reform to Unlock Africa’s $2.8 Trillion – BoG
By Praisebell Rosemond Larbi
The Bank of Ghana (BoG) has called for a fundamental overhaul of Africa’s cross-border payment systems, warning that inefficient, costly, and fragmented payment infrastructure continues to undermine the continent’s ambition to unlock the full potential of its $2.8 trillion single market under the African Continental Free Trade Area (AfCFTA).
Speaking on behalf of the Governor, Dr. Johnson Pandit Asiama, at the African Prosperity Dialogue in Accra on Wednesday, the Second Deputy Governor of the Bank of Ghana, Matilda Asante-Asiedu, said that trade liberalisation alone would not deliver economic integration without corresponding reforms in how payments are made and settled across African borders.
“Trade agreements alone do not create trade. Payments make trade possible,” she said, stressing that payment infrastructure is not a peripheral issue but a central pillar of economic integration, competitiveness, and financial stability across the continent.
High Costs and Slow Settlements Constraining Intra-African Trade
According to the Bank of Ghana, transaction costs for cross-border payments within Africa remain between 7 and 10 percent, more than double the global average of about 3 percent. Settlement timelines are also inefficient, often stretching into several days or even weeks, making African trade more expensive, unpredictable, and less competitive.
The BoG further noted that over 80 percent of payments between African countries are routed through correspondent banks outside the continent, typically denominated in foreign currencies such as the U.S. dollar or euro. This dependence exposes African economies to foreign exchange volatility and results in an estimated $5.3 billion in annual losses through fees and conversion costs.
“These inefficiencies are not just technical problems; they are structural barriers to Africa’s economic transformation,” Ms. Asante-Asiedu said.
AfCFTA’s Promise Hinges on Payment Infrastructure
AfCFTA brings together a market of more than 1.5 billion people with a combined GDP of approximately $2.8 trillion, making it the largest free trade area in the world by number of participating countries. However, the Bank of Ghana warned that without efficient and integrated payment systems, the agreement risks falling short of its potential.
The central bank estimates that intra-African trade could double in the medium term if payment systems are modernised to align with the scale and ambition of AfCFTA.
Local Currency Settlement and PAPSS
Ghana is playing a leading role in promoting the Pan-African Payment and Settlement System (PAPSS), which allows cross-border transactions to be conducted in local African currencies. PAPSS aims to shorten transaction chains, reduce costs, and eliminate the need for third-country correspondent banking.
“Our vision is for African trade to be settled increasingly in African currencies, through African infrastructure, and supported by African institutions,” Ms. Asante-Asiedu stated.
Fintech, Digital Infrastructure, and Regulation
The Bank of Ghana also highlighted a fintech passporting initiative with Rwanda, designed to simplify cross-border licensing and support regional fintech expansion. In addition, Ghana is participating in an Africa-focused digital public infrastructure programme testing interoperability frameworks and exploring future cross-border digital currency arrangements.
The recently passed Virtual Asset Service Providers Act was cited as a key regulatory milestone, aimed at harnessing innovation in digital payments while strengthening consumer protection and financial integrity.
A Shift from Trade Policy to Trade Enablement
The remarks underscore a growing shift among African policymakers, from focusing solely on trade agreements to prioritising payment architecture as a core enabler of integration. Central banks, Ms. Asante-Asiedu noted, must lead this transformation while safeguarding financial stability and maintaining public trust.
“If Africa is to truly integrate, payments must move as freely as goods and services,” she said.
The Bank of Ghana believes that reforming cross-border payment systems is not merely a technical exercise, but a strategic necessity for unlocking AfCFTA’s promise, accelerating inclusive growth, and positioning Africa as a competitive force in global trade.
