In what could be close to a paradigm shift for cross-border trade across Africa, a memorandum of understanding (MoU) has paved the way for introducing an intra-regional payment system with special emphasis on remuneration for stock exchange companies.
The MoU was signed between the 26-member African Securities Exchange Association (ASEA) and the Pan-African Payment and Settlement System (PAPSS).
According to Business Day, it "enables payment transactions in local currencies," which is widely seen as a groundbreaking move for the US$19.4 billion transacted in cross-border African trade annually.
Johannesburg's stock exchange, the oldest and biggest in Africa, is one of the members of ASEA and forms part of a stock exchange linking project that includes seven of the continent's bourses, representing 2 000 companies with a combined market capitalization value of £1.5 trillion, as reported by Thuletho Zwana.
Thapelo Tsheole, ASEA's president, applauded the development, saying it will deepen market integration and allow for effortless securities investments across Africa.
His sentiments were echoed by Mike Ogbalu the 3rd, chief executive officer of PAPSS, who said it would significantly facilitate trade by easing bourse-related investments.
