GSE, PAPSS Partnership Will Propel Market Expansion

Ms. Abena Amaoh, GSE-MD

The Ghana Stock Exchange (GSE) – through its membership with the African Securities Exchanges Association (ASEA) – has signed a memorandum of understanding (MoU) with the Pan African Payments and Settlement System (PAPSS) to collaborate on ways to enhance the payment process for cross-border securities transactions in Africa.

The MoU signing, which took place during ASEA’s 73rd Executive Committee Meeting on April 14, 2023 – alongside the 11th Building Africa Financial Markets (BAFM) seminar hosted by the Zimbabwe Stock Exchange (ZSE) – is anticipated to yield numerous advantages, including capital markets integration across the continent.

PAPSS is a financial market infrastructure that is supported by the African Union Commission, African Export-Import Bank (Afreximbank) and the Africa Continental Free Trade Area (AfCFTA) secretariat. The platform’s primary objective is to promote trade and economic integration across Africa by offering a dependable, secure and efficient method of settling cross-border transactions.

Commenting on the MoU, the president of ASEA, Thapelo Tsheole said: “Signing the MoU between ASEA and PAPSS marks a significant step toward enhancing the efficiency and liquidity of African securities exchanges. We look forward to working closely with PAPSS to identify potential ways of easing payments and settlements as we seek to facilitate cross-border trading of securities among member exchanges. In the coming weeks, we will hold consultative meetings to establish an implementation plan for this collaboration”.

Mr. Tsheole emphasised that PAPSS could be instrumental to the African Exchanges Linkage Project, which aims to facilitate cross-border trading. ASEA, with its nine exchanges and a market cap of US$1.5trillion, provides an ideal umbrella for PAPSS to achieve its objectives.

The MoU’s timing has been described as “especially relevant” considering the recent introduction of ASEA’s African Exchanges Linkage Project (AELP) in December 2022, which aims to make cross-border trading more accessible.

With assistance from the African Development Bank (AfDB), ASEA has made notable advancements in connecting member exchanges across the continent through the AELP. The first phase has covered seven exchanges and 14 countries, and they plan to broaden this to 15 exchanges throughout 22 countries.

Offering their thoughts on the MoU, analysts described the partnership as a significant development for the country’s capital market.