The Arab Monetary Fund (AMF) and the African Export-Import Bank (Afreximbank) announced today the signing of a Memorandum of Understanding (MoU) that sets the foundation for cooperation and interoperability between Buna, the cross-border and multi-currency payment system owned by the AMF, and the Pan-African Payment and Settlement System (PAPSS), owned by Afreximbank.
Under the terms of this MoU, Buna and PAPSS will cooperate to achieve efficient interoperability between their respective platforms and act as payment gateways that link the Arab region to the African continent. Buna and PAPSS interoperability will allow their participants to process fast, cost-effective, and secure cross-border payments in multi-currencies, and expand their footprint in the global payment landscape.
This strategic collaboration is in line with Buna’s mission to play a pivotal role in supporting the growth of trade and investments between the Arab region and Africa. It highlights the promising opportunity and high potential for payment systems like Buna and PAPSS to drive and support the growth of trade exchange and investment flows between the Arab world and Africa.
Commenting on this MoU, His Excellency Dr. Abdulrahman A. Al Hamidy, Director General Chairman of the Board of the Arab Monetary Fund highlighted the important role of Afreximbank and the AMF in leading strategic initiatives that can strengthen the economic ties between the Arab region and the African continent and support the global efforts to promote financial inclusion and improve access to appropriate financial services.
H.E Dr. Al Hamidy said: “Our collaboration represents an exemplary model of the leading role that the AMF and Afreximbank can play by working together to enable efficient access to payments, in line with the “G20 roadmap” to enhance cross-border payments. Buna’s success to establish interoperability with regional market infrastructure like PAPSS is another key milestone in Buna’s continuous efforts to expand its regional and global network and increase the value it brings to its participants. We also take this opportunity to express our gratitude to the Arab Bank of Economic Development in Africa (BADEA) for its support in establishing this partnership between the AMF and Afreximbank.”
His Excellency Professor Benedict Oramah, President of Afreximbank said: “The MoU with BUNA is yet another milestone that PAPSS has registered after its commercial launch. The Arab World and Africa have a long history of trade relations and the PAPSS-BUNA partnership will further facilitate the growth of trade between the two regions. The integration will enable the banks across Africa and the Arab World to have a seamless and one-stop center for supporting their clients to transfer value to their counterparts from either region”. As chairperson of the Arab-Africa Trade Bridges (AATB), I am very proud of this outcome and thank the Arab Monetary Fund, BADEA, and the Islamic Trade Finance Company (ITFC) for their strong partnership.
H.E. Dr. Sidi Ould Tah, BADEA Director General commends the leadership of the AMF and Afreximbank and the respective teams from BUNA and PAPSS on the signing of this MoU, a remarkable milestone which opens up to more work that will enable the interoperability of the two systems for more trade and prosperity between the Continent and the Arab World. BADEA reiterates its full support to this initiative and stands ready to provide needed assistance to deliver the BUNA – PAPSS interoperability.
Buna, is a cross-border payment system owned by the Arab Monetary Fund, aiming to enable financial institutions and central banks in the Arab region and beyond to send and receive payments in local currencies as well as key international currencies in a safe, cost-effective, risk-controlled, and transparent environment. Buna offers participants modern payment solutions that comply with international standards, principles, and compliance requirements. Thanks to its cross-border payment system Buna contributes to exploring and strengthening opportunities for economic and financial integration in the Arab region and supporting investment ties with the global trading partners. Buna welcomes the inclusion of all banks that meet the criteria and conditions for participation, primarily the standards and procedures of compliance aspects.
The Pan-African Payment and Settlement System – PAPSS is a centralized Financial Market Infrastructure that enables the efficient flow of money securely across African borders, minimizing risk and contributing to financial integration across the regions. PAPSS works in collaboration with Africa’s central banks to provide a payment and settlement service to which commercial banks and licensed payment service providers across the region can connect as ‘Participants’.
Afreximbank and the African Union (“AU”) launched the PAPSS at the Twelfth Extraordinary Summit of the African Union held on July 7, 2019, in Niamey, Niger Republic, therefore adopting PAPSS as a key instrument for the implementation of the African Continental Free Trade Agreement (AfCFTA).
Further, in its thirteenth (13th) extraordinary session, held on the December 5, 2020, the assembly of African Union recommitted and instructed the Afreximbank and the AfCFTA secretariat to finalize among others, work on the Pan-African Payments and Settlements System (PAPSS). The 35th Ordinary Session of the Assembly of the AU, further directed the AfCFTA and Afreximbank to deploy the system to cover the entire continent.
Source: The Arab Monetary Fund (Published on April 21, 2022)