The Central Bank of Liberia (CBL) has unveiled a game-changing development that promises to revolutionize how Liberian businesses engage in trade across West Africa. The newly introduced system now allows businesses and individuals in Liberia to pay for goods and services in Ghana, Guinea, Nigeria, Sierra Leone, and Gambia using Liberian dollars—eliminating the need to convert to local currencies.
This initiative, facilitated by the Pan-African Payment and Settlement System (PAPSS), is the fastest and most affordable way to send and receive money in Liberian dollars across Africa. PAPSS is a centralized payment and settlement infrastructure designed to support the economic and financial integration of Africa by allowing transactions in local currencies, with central banks acting as settlement agents.
For the first time, Liberian businesses can trade with their counterparts in Ghana, Nigeria, Sierra Leone, Guinea, and The Gambia without the hassle of currency conversion. This streamlines cross-border transactions, making it easier and more efficient for businesses to operate in multiple countries within the region.
Here’s how it works:
1. Purchase Goods or Services: When a Liberian business needs to buy goods or services in one of the participating countries, they simply ask their bank to pay the amount in Liberian dollars.
2. Processing the Payment: The bank then forwards the payment request to PAPSS, which verifies and processes the transaction.
3. Local Payment: The seller’s bank in the other country receives the payment request and pays the seller in their local currency.
This system eliminates the need for US dollars or other foreign currencies, allowing businesses to transact directly in Liberian dollars. The process is fast, secure, and cost-effective, providing a significant boost to intra-African trade and making it easier for Liberian businesses to expand their operations regionally.
Benefits of the New Payment System:
• Cost Efficiency: By removing the need for currency conversion, businesses save on exchange fees, making cross-border transactions more affordable.
• Speed: Transactions are processed quickly, reducing delays and ensuring that goods and services are paid for promptly.
• Security: The system is designed to be secure, minimizing the risk of fraud and ensuring that transactions are safely completed.
This innovative development marks the beginning of a new era for Liberian businesses. The ability to trade directly in Liberian dollars with five other West African nations opens up new opportunities for growth and expansion. As the region continues to integrate economically, PAPSS is poised to become a cornerstone of intra-African trade, driving economic development and fostering closer ties among African nations.
Liberian businesses are encouraged to take advantage of this new system, which simplifies and streamlines trade across the region. With PAPSS, the future of West African trade looks brighter than ever.
