PHANICE MOGAKA
WALE OSOFISAN, PhD
What good is a continental market if money cannot cross the borders that market was designed to erase?
This is the question that haunts the AfCFTA. You can build the factories. You can reform the logistics. You can even design financing instruments that reach the 90 percent of African businesses conventional capital has always ignored. But if a trader in Accra cannot pay a supplier in Lagos without her money routing through London or New York, losing days and double digit percentages along the way, then every preceding reform hits a wall. The wall is payments.
Across the first three parts of this series, we traced a structural logic. Part 1 argued that Africa’s next half century depends on whether it finally builds the productive capacity it has deferred for six decades. Part 2 showed that production without efficient logistics is output trapped in warehouses, ports and border queues. Part 3 confronted the reality that industrialisation stalls without MSME financing, because the enterprises that comprise more than 90 percent of Africa’s business fabric cannot participate in value chains they cannot afford to enter.
This final instalment completes the architecture. Payments are the bloodstream of the AfCFTA economy. And right now, that bloodstream is clotting.
Africa’s payment architecture was designed to serve someone else
Here is a statistic that should unsettle anyone serious about African economic sovereignty: more than 80 percent of intra African payments still route through correspondent banks outside the continent. Not through Nairobi or Abidjan or Johannesburg but through London, New York, Paris. The architecture Africa inherited was not built to facilitate trade between Africans. It was built to facilitate the extraction of value from Africa. And in 2026, that architecture remains largely intact.
The consequences are brutal and measurable. Settlement takes two to five days depending on the corridor. Transaction costs reach 10 to 20 percent, especially for MSMEs in West and Central Africa. Currency conversion spreads alone drain more than $5 billion annually from the continent. These are not fees for service. They are structural taxes on African ambition. The continent trades more easily with Europe or Asia than with itself. This is not a market failure. It is a design feature of a system Africa did not design.
The result is visible in the headline number that has barely shifted in decades: intra African trade remains stuck at 14 to 16 percent of total trade, compared to 60 percent in Europe and 50 percent in Asia. A continent of 1.4 billion people, 54 economies and a $3.4 trillion combined GDP and it still finds it easier to buy from Shanghai than from the country next door.
This is another structural contradiction at the heart of the AfCFTA. A continental market cannot function on payment rails designed for a different century and a different beneficiary.
The human cost has a name
The numbers matter. But the human cost is where the argument becomes undeniable. Consider Ama. She is a textile trader in Accra who supplies boutiques in Lagos and Cotonou. She is not a case study. She is the African economy in miniature.
When Ama travels, she carries cash because she has no better option. That means theft. Extortion. Harassment at borders. The African Development Bank has documented that more than 40 percent of informal cross border traders in East, Central and West Africa carry physical cash because they lack access to safe digital payment alternatives. When Ama tries to pay digitally, the money takes days to arrive. She watches her margins disappear into double currency conversion – cedis to dollars, dollars to naira – a route that benefits every intermediary except her. She cannot fulfil urgent orders because her working capital is stuck in transit. She cannot scale because her entire business is built on a foundation of uncertainty.
Ama is not an outlier. She is the median. Multiply her by tens of millions and you begin to see the scale of what the AfCFTA must solve. If the continental market cannot work for Ama, it does not work.
PAPSS, right answer; but scale, unfinished question
The Pan African Payment and Settlement System was built to solve precisely this problem. PAPSS allows instant cross border payments in local currencies, settling within seconds rather than days. Afreximbank estimates that full adoption could save the continent more than $5 billion annually in settlement and conversion costs. It is, without exaggeration, one of the most consequential pieces of financial infrastructure Africa has built in decades.
And yet, only 25 to 30 percent of African banks are fully integrated. Fewer than 10 percent of MSMEs even know PAPSS exists. Regulators are moving carefully, which is understandable but caution at this stage carries its own cost. Without scale, PAPSS cannot deliver its full value. Without full value, adoption remains slow. Without adoption, the system that should be transforming African trade risks becoming another well designed solution searching for momentum.
“Africa cannot build a twenty-first century trade system on twentieth century payment rails,” says Victor Akoma Phillips of Interstellar.
This is where new thinking must enter the frame.
The universal wallet: Not another app but a structural intervention
In recent conversations with Victor Akoma Phillips and Ernest Mbenkum, founder and CEO at Interstellar, a powerful idea surfaced, one that speaks directly to the realities of traders like Ama: a blockchain enabled Universal Wallet for Africa.
Not another mobile money silo. Not a closed loop fintech product. Not a bank account with hidden charges. A simple, interoperable, continent-wide wallet designed specifically for MSMEs who trade across borders.
Here is how it works. Ama sends Ghanaian cedis from her wallet in Accra. Her supplier in Lagos receives naira instantly. No correspondent banks. No dollars. No multi day delays. No cash in a bag at a border crossing. Only a commission of between 0.1 and 0.3 percent. That is the difference between a system that extracts from traders and one that serves them.
The Universal Wallet is not a luxury product. It is a financial inclusion instrument. It eliminates risk, accelerates working capital cycles, and gives MSMEs the structural confidence to trade beyond their borders. This is practical innovation meeting real need the kind Africa’s payment ecosystem has been waiting for.
The numbers tell a story of transformation if Africa chooses it
Africa has more than 40 million MSMEs engaged in some form of crossborder or regional trade. The adoption trajectory of a Universal Wallet reveals what is at stake.
At 20 percent adoption, roughly eight million traders, the liquidity circulating within Africa increases dramatically. At 50 percent, more than 20 million traders transact instantly across borders. At full scale, with 30 to 40 million MSMEs on the wallet, Africa creates one of the largest real time payment ecosystems in the world.
Think about what that means. Billions circulating within Africa instead of leaking out through external correspondent networks. Foreign exchange spreads will be shrinking. Working capital cycles are accelerating. Industrial supply chains are becoming predictable. Cross border trade is becoming as frictionless as sending a text or WhatsApp message.
Afreximbank projects that the AfCFTA could boost intra African trade by 52 percent by 2035 if payment and settlement barriers are removed. A Universal Wallet does not just support that outcome. It accelerates it.
Payments are industrial policy
There is a persistent tendency to treat payments as plumbing necessary infrastructure, but not the main event. This is a mistake. Payments are not downstream of industrialisation. They are constitutive of it. A factory cannot release goods if payment confirmation takes days. A logistics operator cannot move cargo without instant settlement. An MSME cannot hedge against currency exposure on razor thin margins. A modern industrial economy requires instant settlement, predictable currency exposure, low transaction costs, interoperability across borders, and trust.
Without functioning payment rails, Africa’s industrial push will always be constrained by liquidity gaps, broken supply chains and the compounding cost of doing business on a continent that makes business unnecessarily expensive.
When we say payments are the bloodstream, this is what we mean: they carry oxygen to every organ of the economic body. Factories, logistics networks, financing mechanisms all of them depend on money moving. If the blood clots, the body fails. It does not matter how strong the skeleton is.
Regulatory alignment is not a technical detail. It is the multiplier.
For PAPSS and a Universal Wallet to scale, African regulators must harmonise KYC standards, licensing frameworks, data sharing rules and consumer protection norms across jurisdictions. This sounds bureaucratic. It is anything but. Without regulatory interoperability, payment interoperability will always be partially a patchwork of bilateral arrangements rather than a continental system.
The AfCFTA Secretariat, central banks and regional economic communities must treat regulatory alignment as core infrastructure. As important as roads. As urgent as ports. As foundational as power. Because without it, the technical solutions, however brilliant, operate at a fraction of their potential.
Governments have direct incentives to act. Instant, digital, cross border payments increase tax visibility, reduce revenue leakages, formalise trade flows and strengthen fiscal forecasting. A continent-wide wallet does not only empower MSMEs. It strengthens the fiscal architecture of African states. Sovereignty and efficiency, for once, pulling in the same direction.
The bloodstream must flow
Across four instalments, this series has built a single argument from four interlocking pillars. Africa must produce more. Production must move efficiently. MSMEs must be financed to participate. And money must move as fast as goods. Payments complete the system. They are the final piece of the industrialisation architecture and the piece upon which every other reform depends.
If Africa gets payments right, it unlocks a 3.4 trillion market. If it gets payments wrong, the AfCFTA becomes a treaty on paper admirable in ambition, inert in practice.
Call to action
The choice is structural, not rhetorical. And here are five moments for action required now.
1. Banks must integrate with PAPSS at scale not as a compliance exercise, but as a competitive imperative.
2. Regulators must harmonise the rules that allow instant settlement across borders treating alignment as infrastructure, not aspiration.
3. Fintech innovators must build interoperable solutions not new silos that fragment the ecosystem further.
4. Governments must champion digital payments as a pillar of industrial policy not an afterthought to it.
5. The AfCFTA Secretariat must treat payments as the backbone and bloodstream of the continental market because that is exactly what they are.
Africa has built the vision. Now it must build the rails that allow that vision to function for the Amas of this continent, who do not need more promises. They need a system that works for them. Payments are the final piece. And they are the pieces that will determine whether the AfCFTA thrives or flatlines.
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Africa’s Industrialisation Moment: A Four Part Series.
Part 1: Production • Part 2: Logistics • Part 3: MSME Financing • Part 4: Payments
By Phanice Mogaka and Wale Osofisan, PhD
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Phanice Mogaka is a public affairs advisor and pan‑African development advocate known for her work in diplomacy, strategic communications, and shaping narratives that advance Africa’s political and economic agency. Dr. Wale Osofisan is a governance strategist, international development expert, and policy analyst recognised for his thought leadership on Africa’s political economy, trade systems and development futures.
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