Nigeria’s FX pressure to ease as Afreximbank integrates

By Chinwendu Obienyi

Nigeria’s reliance on the United States dollar for cross-border trade is expected to ease significantly as the African Export-Import Bank (Afreximbank) says it is almost completing the integration of Africa’s 42 national payment systems through the Pan-African Payment and Settlement System (PAPSS).

The integration, championed by Afreximbank in partnership with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat, marks a historic shift toward intra-African financial independence.

Once fully operational, PAPSS will enable businesses and individuals across the continent to settle trade transactions in their local currencies, eliminating the need for dollar intermediaries.

Speaking at a one-day Afreximbank conference in Cairo to celebrate his decade-long service, Professor Benedict Oramah, the outgoing President and Chairman of the Bank, highlighted the milestone as one of Africa’s most transformative financial innovations.

“After more than 60 years of political independence, we are finally on the verge of integrating the continent’s 42 payment systems into a single payment rail. Finally, we have made African currencies legal tenders across African borders”, Oramah said.

The move, Daily Sun understands, is expected to have far-reaching benefits for Nigeria, Africa’s largest economy and a key player in regional trade.

According to economic analysts, this could ease pressure on foreign exchange reserves, strengthen the naira, and cut transaction costs for businesses engaged in cross-border trade.

Under the current system, a Nigerian exporter selling goods to Ghana or Kenya typically receives payment via the U.S. dollar, an arrangement that increases costs, delays transactions, and fuels dollar demand. PAPSS will allow such payments to be made directly between local currencies, with Afreximbank providing the necessary clearing and settlement infrastructure backed by a $3 billion facility.

Commenting further, analysts say the system could transform Nigeria’s export competitiveness under the AfCFTA by simplifying trade settlement and encouraging small and medium enterprises (SMEs) to engage in regional trade.

Nigeria’s fast-growing fintech sector is also expected to benefit, as platforms like Interswitch, Flutterwave, and Paystack can integrate with PAPSS to expand digital payment solutions across Africa.

Beyond Nigeria, PAPSS aims to strengthen Africa’s collective economic resilience by promoting financial sovereignty and reducing dependence on foreign currencies for intra-African trade, a dependence that costs the continent an estimated $5 billion annually in conversion and transaction fees.

For Oramah, the initiative represents a cornerstone achievement in its mission to accelerate Africa’s economic integration and self-reliance.

He revealed that since 2015, the Bank has committed billions of dollars to build the continent’s trade infrastructure, from financing industrial parks and special economic zones to creating digital platforms like the Africa Trade Gateway and hosting the Intra-African Trade Fair, which has generated over $170 billion in trade and investment deals.

“Even while pursuing these bold initiatives, we maintained a strong institutional and financial foundation. The Bank’s balance sheet and guarantees grew nearly eightfold, from $6 billion in 2015 to $44 billion in 2025. Over the same period, revenues and net income expanded significantly, enabling us to pay out $1.4 billion in dividends to our shareholders”, he revealed.