The Securities and Exchange Commission (SEC) has said it is excited about the implementation of the Pan-African Payment Settlement System(PAPSS) as it will encourage intra-African trade and aid diversification within the capital market.
This was stated by head, Office of the Chief Economist of SEC, Dr. Okey Umeano, during an interview in Abuja. The Nigerian Exchange and the Pan-African Payment Settlement System recently signed a Memorandum of Understanding (MoU) to support cross-border payments across capital markets in Africa.
Umeano said, “This MoU begins to implement something that we have been very excited about. PAPSS makes it easy to trade across Africa. It makes Intra-African trade more efficient and we have always wanted it.
“It was created initially for just the usual everyday trade but we have always wanted it for the capital market because we think that if we can link the exchanges and the markets across the continent, we will have a bigger opportunity set for everybody, so we have been working on that.”
He commended the NGX for taking the lead on this, saying, the MoU allows them to stick this up with the Ghana stock exchange and ‘we hope that other exchanges and other market players will key in and take this opportunity.’
He stated that given the way the markets are, this implementation will improve opportunities for diversification and make markets able to perform better.
On where the initiative is going next, Umeano stated, it is a very big step that is expected to scale to other markets and reap the enormous benefits, adding that, ‘Nigeria and Ghana have always been traditional partners and I think it is easier to start off with Ghana.’
In the integration project currently ongoing, he said, the SEC and other regulators are encouraging issuers to be able to access markets that are different from the market of the primary issue because when issuers know that the chances of their issues being more successful given that they have a larger market to sell into, it will increase or encourage them to issue more.
“If there is an issue in Nigeria, anybody anywhere in Africa can take part in that issue in their local currency so this is very important. I see this as a very big one, for many years now the primary side of the market has not been very good. We have seen a lot of issues across the continent and even in other parts of the world,” he explained.
He assured that regulators are in support of the initiative and are making efforts to harmonise regulations to support these laudable developments.
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