Ethiopia's central bank joins African payments system PAPSS - Reuters

Ethiopia's central bank has joined the Pan-African Payment and Settlement System (PAPSS), the continent-wide platform designed to let African firms settle cross-border trades in local currencies rather than through correspondent banks abroad.

PAPSS, developed by Afreximbank, aims to reduce reliance on hard currencies such as the dollar and cut the cost and delay of intra-African payments. For Ethiopia, membership could simplify settlement for exporters and importers who currently route transactions through foreign intermediaries — a practical concern for a economy that has faced persistent foreign-exchange constraints.

The move also fits a broader trend: African central banks and commercial lenders gradually connecting to shared payment infrastructure to lower transaction costs and deepen regional trade under the African Continental Free Trade Area. Market watchers will focus on how quickly Ethiopian banks integrate with the system, whether transaction volumes build beyond pilot levels, and whether PAPSS expands the range of currencies it settles. Adoption pace, not the announcement itself, is the signal to track.