Abstract: Background: Africa’s intra-continental trade remains constrained by reliance on USD correspondent banking, which raises costs and slows settlements, undermining AfCFTA’s integration goals. Purpose: This study evaluates whether the Pan-African Payment and Settlement System (PAPSS) can reduce Africa’s USD dependence and materially enhance trade integration under AfCFTA. Research questions: RQ1 examines PAPSS performance versus USD channels on cost, speed, and reliability. RQ2 assesses the extent to which PAPSS adoption can increaseintra-African trade volumes and integration compared with continued USD dominance. RQ3 investigates the technological and institutional factors shaping PAPSS diffusion across countries and financial institutions. Methodology: Using a secondary-data mixed-methods design, we synthesize Afreximbank/PAPSS operational data, UN and WTO trade statistics, SWIFT currency-usage indicators, and policy documents, complemented by thematic analysis of stakeholder communications. Quantitatively, we compare fee and time profiles for USD correspondent flows versus PAPSS and implement an augmented gravity model with counterfactual simulations to estimate trade impacts from reduced payment frictions. Results: PAPSS consistently delivers near-instant cross-border settlement and markedly lower costs, with total payment frictions around ~1 percent compared with 10–30 percent for large USD-mediated transactions; these efficiency gains are associated with meaningful potential uplifts in intra-African trade under plausible adoption scenarios. Conclusions and implications: Grounded in Transaction Cost Economics, Technology Acceptance, and Institutional Theory, the findings indicate that PAPSS can serve as critical financial infrastructure for AfCFTA by lowering transaction costs and time while retaining payments within African jurisdiction. Realizing these benefits at scale depends on user-perceived usefulness and ease of use, regulatory harmonization, and central-bank stewardship. Policy actions that accelerate onboarding, align KYC/AML rules, and deepen system interoperability are likely to convert PAPSS’s technical advantages into durable trade-integration gains.

Keywords: AfCFTA; PAPSS; intra-African trade; de-dollarization; cross-border payments; transaction costs; monetary sovereignty.