Current Research Bulletin

[1] Purpose – The Pan-African Payment and Settlement System (PAPSS) is critical to realising the African Continental Free Trade Area (AfCFTA), yet adoption remains patchy and uneven. This study interrogates the regulatory frictions that slow PAPSS uptake in Rwanda, Ghana, Kenya and Nigeria and quantifies the opportunity cost of inaction for the wider continent’s trade agenda. [2] Design/methodology/approach – We integrate institutional, diffusion-of-innovation and resource-dependence theory within a mixed-methods design. An AI-assisted content analysis of more than 80 statutory texts produces a six-dimension Regulatory Readiness Index (RRI), while an augmented Poisson gravity model, calibrated with World Bank and Afreximbank data, simulates trade gains under alternative cost-reduction scenarios. 

[3] Findings – Currency-convertibility restrictions, divergent KYC/AML thresholds and data-localisation clauses emerge as the most binding constraints. RRI scores range from 56.7 (Nigeria) to 65.0 (Kenya), explaining cross-country variance in early PAPSS transaction volumes. Full PAPSS roll-out coupled with moderate regulatory harmonisation could trim average payment costs by 40–50 %, raising bilateral intra-African trade by 10–30 % within the next decade. 

[4] Research implications – By empirically isolating how coercive, mimetic and resource logics condition payment-system diffusion, the paper advances theorisation of fintech integration in emerging markets and offers a replicable AI-enhanced methodology for regulatory benchmarking. 

[5] Practical implications – Policymakers should prioritise phased FX liberalisation, mutual KYC recognition and a pan-African fintech-passport regime; without these reforms, AfCFTA’s digital-trade protocol risks under-delivery. 

[6] Originality/value – This is the first multi-country investigation to fuse AI-driven regulatory analytics with econometric trade modelling, delivering an evidence-based roadmap for an interoperable African payments union and a template for future digital-trade research.

AfCFTA digital trade; PAPSS adoption; intra-African trade facilitation; regulatory readiness index; cross-border payment integration; institutional theory Africa; fintech policy harmonisation

1. Addison, E. (2022, June 8). Boosting the AfCFTA: The role of payment and settlement systems [Speech]. Ghana Academy of Arts and Sciences Forum. Bank of Ghana. Retrieved May 24, 2025, from https://www.bog.gov.gh/wp-content/uploads/2022/06/Governors-Speech-Ghana-Academy-of-Arts-and-Sciences-Forum-08-06-2022.pdf
2. AfCFTA Secretariat. (2024). Protocol on Digital Trade (11 sections). African Union.
3. African Development Bank Group. (2021). High-level knowledge event: “From debt  resolution to growth: The road ahead for Africa”. Retrieved from https://am.afdb.org/en/programme/high-level-knowledge-event-debt-resolution growth-road-ahead-africa
4. AfricaNenda. (2025). African regions and countries developing instant payment systems [Map]. AfricaNenda. Retrieved May 24, 2025, from https://www.africanenda.org/en/map
5. African Business. (2022, May). What you need to know about the African Continental Free Trade Area. Retrieved May 24, 2025, from https://african.business/2022/05/trade-investment/what-you-need-to-know-about-the-african-continental-free-trade-area
6. African Union. (2024). Operational Phase of the AfCFTA – PAPSS Overview [Brochure]. African Union Commission.
7. Afreximbank. (2024). Exchange rate mechanism: Towards an efficient payment and settlement system. Retrieved May 24, 2025, from https://media.afreximbank.com/afrexim/Exchange-Rate-Mechanism-Towards-An-Efficient-Payment-and-Settlement-System.pdf
8. Archibald, M. E. (n.d.). Resource dependency theory. Encyclopaedia Britannica. Retrieved May 24, 2025, from https://www.britannica.com/topic/resource-dependency-theory
9. Bionducci, L., Botta, A., Bruno, P., Denecker, O., Gathinji, C., Jain, R., Nadeau, M.,  & Sattanathan, B. (2023). On the cusp of the next payments era: Future opportunities  for banks. McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/financial-services/our-insights/the-2023- mckinsey-global-payments-report 
10. Constantinovici, A. (2022, July 7). Interview with Mike Ogbalu III on the Pan-African Payments & Settlement System. ThePaypers. Retrieved May 24, 2025, from https://thepaypers.com/interviews/the-pan-african-payments-and-settlement-system-papss-challenges-milestones-and-the-current-state-of-affairs--1257399
11. DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality. American Sociological Review, 48(2), 147–160.
12. Emejo, J. (2025, April 29). In major policy shift to boost AfCFTA, CBN lowers documentation for low-value PAPSS transactions. THISDAYLIVE. Retrieved May 24, 2025, from https://www.thisdaylive.com/2025/04/29/in-major-policy-shift-to-boost-afcfta-cbn-lowers-documentation-for-low-value-papss-transactions/
13. Fintech News Africa. (2025, March 3). Ghana and Rwanda partner on fintech licence passporting and cross-border payments. Retrieved May 24, 2025, from https://fintechnews.africa/44816/fintech-ghana/ghana-and-rwanda-partner-on-fintech-licence-passporting-and-cross-border-payments/
14. Havranek, T., & Irsova, Z. (2017). The role of resources in the formation of a country's economic growth. Journal of Economic Perspectives, 31(2), 65-86. Retrieved May 24, 2025, from https://www.sciencedirect.com/science/article/abs/pii/S0301479716306740
15. International Trade Administration, U.S. Dept. of Commerce. (2023). Pan-African Payment and Settlement System. Trade.gov. Retrieved [Date], from https://www.trade.gov/market-intelligence/pan-african-payment-and-settlement-system:contentReference[oaicite:49]{index=49}:contentReference[oaicite:50]{index=50}
16. International Trade Administration, U.S. Dept. of Commerce. (2024). AfCFTA Digital Trade Protocol. Trade.gov. Retrieved [Date], from https://www.trade.gov/market-intelligence/afcfta-digital-trade-protocol:contentReference[oaicite:51]{index=51}
17. Investopedia. (n.d.). Diffusion of innovations theory. Retrieved May 24, 2025, from https://www.investopedia.com/terms/d/diffusion-of-innovations-theory.asp
18. IMF. (2022, Sep). Digital journeys: Freeing foreign exchange in Africa. Finance & Development, 59(3). Retrieved from https://www.imf.org/en/Publications/fandd/issues/2022/09
19. Kigali International Financial Centre. (2023). Unlocking the potential of digital  payments in Africa: A comparative analysis of regulatory sandboxes and payment  service providers. Retrieved from https://kifc.rw/wp-content/uploads/2023/09/avca23- 04-kifc-payment-providers-report_4_1.pdf 
20. Mene, W. (2025, January 29). Intra-African trade and its potential to accelerate progress toward the SDGs. Brookings Institution. Retrieved May 24, 2025, from https://www.brookings.edu/articles/intra-african-trade-and-its-potential-to-accelerate-progress-toward-the-sdgs/
21. Monye, C. (2022). Regional integration in Africa: Proposals for an Africa-wide payment system. Law, Democracy & Development, 26(1), 71–95. Retrieved from https://www.scielo.org.za/pdf/ldd/v26/
22. North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge University Press.
23. Pfeffer, J., & Salancik, G. R. (1978). The External Control of Organizations: A Resource Dependence Perspective. Harper & Row.
24. Rogers, E. M. (2003). Diffusion of Innovations (5th ed.). Free Press.
25. Ruhamya, C., Mugenzi, J., & Katembera, R. S. (2023). Assessing Regulatory Barriers to PAPSS Adoption and Intra-African Trade (Conference Paper). University of Rwanda. [User-supplied manuscript].
26. Smart Africa Secretariat. (2023). Blueprint for e-payments for the facilitation of digital  trade across Africa. Retrieved from https://smartafrica.org/wp content/uploads/2023/11/31758-e-payments-blueprint_eng.pdf 
27. Scott, W. R. (2014). Institutions and Organizations: Ideas, Interests, and Identities (4th ed.). Sage.
28. The Paypers. (2024, April 23). The Pan-African Payments and Settlement System (PAPSS): Challenges, milestones, and the current state of affairs [Interview]. The Paypers. Retrieved May 24, 2025, from https://thepaypers.com/interviews/the-pan-african-payments-and-settlement-system-papss-challenges-milestones-and-the-current-state-of-affairs--1257399
29. Thomas, D. (2022, May 18). What you need to know about the African Continental Free Trade Area. African Business. https://african.business/2022/05/trade-investment/what-you-need-to-know-about-the-african-continental-free-trade-area/
30. UNCTAD. (2020). Economic development in Africa report 2020: Tackling illicit  financial flows for sustainable development in Africa. United Nations Conference on Trade and Development. Retrieved from https://unctad.org/publication/economic development-africa-report-2020 
31. UNECA. (2023). Effective AfCFTA implementation will boost Africa’s economy and  global competitiveness. Retrieved from https://www.uneca.org/stories/effective-afcfta implementation-will-boost-africa%E2%80%99s-economy-and-global competitiveness 
32. U.S. Department of Commerce. (2024, November 25). AfCFTA Digital Trade Protocol. International Trade Administration. Retrieved May 24, 2025, from https://www.trade.gov/market-intelligence/afcfta-digital-trade-protocol
33. Wamkele Mene, A.-G. (2025, Jan 29). Intra-African trade and its potential to accelerate progress toward the SDGs. Brookings Institution – Africa in Focus. Retrieved from https://www.brookings.edu
34. World Bank. (2021). The Global Findex Database 2021: Financial inclusion, digital  payments, and resilience in the age of COVID-19. World Bank. Retrieved fromhttps://documents.worldbank.org/en/publication/documentsreports/documentdetail/099818107072234182/idu06a834fe908933040670a6560f44e3f 4d35b7 
35. World Bank. (2023). Remittance prices worldwide. Retrieved fromhttps://remittanceprices.worldbank.org/sites/default/files/rpw_main_report_and_an nex_q423_final.pdf
36. Wellisz, C. (2022, September). Digital journeys: Freeing foreign exchange in Africa. International Monetary Fund. Retrieved May 24, 2025, from https://www.imf.org/en/Publications/fandd/issues/2022/09/Digital-Journeys-Africa-freeing-foreign-exchange-wellisz