The National Bank of Ethiopia has officially joined the Pan-African Payment and Settlement System, creating a direct route for local-currency transactions across African markets. Announced by NBE Governor Eyob Tekalign and PAPSS Chief Executive Officer Mike Ogbalu III in Addis Ababa, the move cuts out traditional intermediaries and the US dollar.
For a nation where foreign exchange queues have long dictated the rhythm of commerce, stepping into a continent-wide network changes the mechanics of trade. Member financial institutions can use the network to start payments in a single African currency and disburse funds to beneficiaries in another. Payments are designed to settle within 120 seconds, bypassing the conventional correspondent banks abroad that historically routed these financial flows.
Foreign Exchange Reforms and Economic Context
The membership arrives as Ethiopia reshapes its financial sector. The foreign exchange reforms introduced in July 2024 replaced an administratively determined exchange rate framework with a market-based system, letting authorized banks negotiate rates and trade foreign currencies under updated rules.
Subsequent policy adjustments loosened restrictions further. To boost trade, the central bank increased the maximum allowable advance payment for imports from 5,000 US dollars to 50,000 US dollars per transaction in May 2025, while simultaneously capping specific bank foreign exchange fees at four percent. Ethiopia’s National Digital Payments Strategy for 2026–2030 identifies cross-border payment connectivity as an urgent priority, pointing toward regional payment systems to ease trade bottlenecks.
Continental Expansion of the Payment Network
PAPSS has steadily widened its institutional reach across the continent. Launched in January 2022 with just 10 commercial banks, the system now operates in more than 15 countries including Nigeria, Zambia, Malawi, Kenya and Tunisia, connecting more than 150 commercial banks—though South Africa remains outside the network. Further north and central, the Bank of Central African States joined the network in July 2026, extending coverage across the six nations of the Central African Economic and Monetary Community.
Ethiopia’s integration into the PAPSS network represents an important step in our continued efforts to modernise our financial system and deepen our economic connections with the rest of Africa.
Eyob Tekalign, Governor of the National Bank of Ethiopia
Ethiopia joining the PAPSS network is an important milestone,
he said during the joint announcement.
Addis Ababa Prepares to Host PAPSS COWRY 2026
Alongside the membership news, officials confirmed that Addis Ababa will host the second edition of PAPSS COWRY 2026 on November 26–27 at the Ethiopian Skylight Hotel. The conference, themed Scaling Africa’s Sovereign Payments: From Continental Connectivity to Global Integration,
is expected to draw over 1,000 delegates, including central bank governors, commercial bank executives, fintech firms, and financial regulators.
Discussions will center on local-currency settlement, interoperability, artificial intelligence, stablecoins, digital assets, cybersecurity, and links between African and global payment systems.
Technical Integration and Unresolved Settlement Rules
While the institutional agreement is signed, the practical benefits for traders depend entirely on domestic execution. The next stage will involve connecting domestic financial institutions, establishing compliance protocols, and deciding which cross-border transaction categories may use the system.
Although customers can transact in local currencies, underlying settlement arrangements may still require hard currencies in certain instances, meaning the system reduces the need for conventional foreign currency channels without completely eliminating foreign exchange requirements. Whether the initiative delivers measurable reductions in settlement delays and costs remains tied to how quickly domestic banks complete their technical integrations and whether participating markets supply sufficient liquidity.