Trade and Investment Cabinet Secretary, Moses Kuria, stated that Kenya would freely trade with African member states that are part of the Pan Africa Payment and Settlement System (PAPSS).
Kenya recently signed to be a signatory to PAPSS, a monetary body aimed at locking the dollar as a medium of payment among African States. This initiative is expected to ease trade and financial transactions between the members of the PAPSS and Kenya.
The system will equally only apply to the signatories of the PAPSS since they are willing to lock out the dollar and make transactions easier.
Moses Kuria shared this information on his X, formerly Twitter, account. According to him, Kenyan companies would now manage to carry out business transactions without really using external currencies as a medium of exchange.
“I am pleased to announce that the Central Bank of Kenya has signed the instruments that have finally seen Kenya join the Pan African Payments and Settlement System. This means that Kenyan companies can trade with their peers from other African Member States using our local currencies, a major boost for the African Continental Free Trade Area,” read Kuria’s post.
Read Also: Kenya Shilling Ranked Sixth Weakest in Africa
The PAPSS System
PAPSS system allows a trader in a country signatory to it to inform its local bank to pay a supplier in another country using their local currency. Afterwards, the bank sends instructions to PAPSS to settle the payment. This settlement would be made through the local bank of the supplier in the currency of their jurisdiction.
The system is required to validate the checks before passing on instructions to the recipient’s local banks.
Prior to this information, President William Ruto had been critical of the overreliance on the US dollar as a medium of payment for trade. He has repeatedly termed it as an unfair move to the African countries.
The criticism has been prevalent after the Kenyan Shilling hit a record high against the dollar.
Subscribe to Switch TV
