Cross-border securities transactions across the African capital markets, on Tuesday, February 28, received a significant boost as the Nigerian Exchange Limited (NGX) and Pan African Payments Settlement System (PAPSS) signed a Memorandum of Understanding (MoU) during a virtual ceremony to integrate the payments system into the capital markets.
The event was attended by notable individuals such as the President, Afreximbank, Professor Benedict Oramah; Director-General of the Securities and Exchange Commission (SEC Nigeria), Lamido Yuguda; and Chairman, NGX, Abubakar Mahmoud, among others.
Speaking, Chief Executive of the NGX Limited, Temi Popoola, assured that integrating the PAPSS into the cross-border capital market framework will fix issues relating to currency convertibility, reduce cost, shorten processing and settlement times, and foster access to capital.
He expressed 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.”
In his address of welcome, Mahmoud, on his part, expressed confidence that investors will enjoy a more efficient and cost-effective way of investing in African securities, thus promoting regional integration and boosting trade flows.
On his part, the CEO, PAPSS, Mike Ogbalu III, described the NGX as a strategic partner, noting that the MoU would drive more transactions to flow into our system.
Beyond that, however, he is confident that more Central Banks on the continent would “join the PAPSS infrastructure to extend the reach to millions more with the resultant positive impact on intra-African Trade.”
For Oramah, PAPSS came about as a recognition of the need to integrate payments for goods and services in Africa amid the implementation of the African Continental Free Trade Agreement (AfCFTA).
“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.
The signing of the agreement, Yuguda believes, is a significant milestone in line with his commission’s revised Capital Market Masterplan, as a result of which he pledged that the “SEC will support all initiatives to enhance the integrity and efficiency of the capital market.”
Expressing his optimism about the potentials of the initiative, the Chairman, Nigerian Exchange Group (NGX Group), Alhaji Umar Kwairanga is optimistic that the agreement will open up new market opportunities to capital market operators across the continent.
Oscar Onyema, Group Chief Executive Officer, NGX Group, in his own remark at the event said the agreement is coming “at the right time when Africa wants to accelerate the implementation of AfCFTA.”
He expressed hope that “it will stimulate the development of intra-African securities trading.”
Commending the initiative also, the President, African Securities Exchange Association (ASEA), Thalepo Tsheole called on stakeholders to come together and ensure it is executed across Africa, emphasising that using the umbrella of ASEA, with 9 exchanges and a market cap of $1.5trn, PAPSS could be instrumental to the African Exchanges Linkage Project.