Ethiopia’s central bank has officially integrated into the Pan-African Payment and Settlement System, marking a major milestone for East Africa’s largest economy and its evolving regional trade ambitions.
According to an official statement released by the platform on Thursday, the landmark move brings the nation closer to full integration into the continent’s modern payment infrastructure.
The integration allows Ethiopian commercial banks and businesses to execute cross-border transactions using local African currencies, eliminating heavy reliance on third-party foreign reserves like the U.S. dollar.
By bypassing traditional intermediate correspondent banks outside Africa, the financial rail significantly slashes processing costs, shrinks settlement times, and preserves critical hard currency buffers.
Developed by Afreximbank alongside the African Union and the AfCFTA Secretariat, PAPSS aims to save the continent an estimated five billion dollars annually in transaction costs.
This integration aligns directly with Ethiopia’s broader macroeconomic reforms, designed to liberalize financial markets, ease chronic foreign exchange constraints, and stimulate intra-African commercial exchange.
