Seamless, inclusive cross-border payments in Africa: AfricaNenda study finds regulatory harmonisation conditionally feasible.

Released recently, the proposed framework seeks to address differences in national regulations that complicate cross-border transactions, increase payment costs and limit the expansion of digital financial services across African markets.

According to figures presented by AfricaNenda, the value of cross-border payments in Africa was estimated at $329 billion in 2025 and could reach $1 trillion by 2035. 

The foundation also indicated that the average cost of sending remittances to Sub-Saharan Africa stands at 7.9%, compared with the United Nations Sustainable Development Goal target of 3%. At that rate, sending $200 costs an average of $15.80, against $6 under the international target, representing an additional $9.80 in transfer costs.

AfricaNenda further estimates that routing payments between African countries through foreign currencies, particularly the US dollar and euro, costs the continent approximately $5 billion annually.

What the feasibility study says

The study, titled African Regulatory Harmonization Framework for Cross-Border Payment Services, concludes that establishing a common regulatory framework across Africa is conditionally feasible. 

The study examined the legal, institutional, technical and economic requirements for harmonising regulations governing cross-border payment services.

It identified differences in licensing requirements, consumer protection rules, customer identification procedures, anti-money-laundering regulations, data governance and foreign exchange controls as obstacles to seamless transactions. 

The assessment proposes common regulatory standards that would facilitate cooperation among national authorities and allow payment service providers to operate across participating markets under agreed conditions.

It also recommends building on existing payment infrastructure rather than creating parallel systems. These include the Pan-African Payment and Settlement System, PAPSS, GIMACPAY in Central Africa and regional payment arrangements operating elsewhere on the continent.

However, the study identifies three major conditions for implementing the proposed framework. These include securing at least $120 million in financing commitments by the end of the first implementation year and adopting a binding African Union protocol or convention within two years. 

The third condition involves establishing a continental supervisory authority, anchored in the Association of African Central Banks, AACB, within 36 months of the study’s endorsement date.

The assessment identifies the West African Economic and Monetary Union and East African Community as ready for initial implementation. 

Meanwhile, the Economic and Monetary Community of Central Africa, which includes Cameroon, alongside the Economic Community of West African States and Southern African Development Community, are classified as conditionally ready, requiring additional measures before full participation.

Different regulations hinder cross-border payments

Speaking to The Guardian Post recently during a high-level dialogue on the study in Nairobi, AfricaNenda Foundation's Deputy Chief Executive Officer, Sabine F. Mensah, explained that differences in national regulations remain among the major obstacles preventing instant money transfers across African borders.

She further explained that differences in anti-money laundering and counter-terrorism financing requirements also affect the speed and cost of transactions. 

Mensah said where compliance requirements differ, payment service providers may need to verify transactions manually, increasing processing time and operational expenses. 

According to her, aligning these requirements would reduce the complexity faced by financial institutions and digital payment providers operating in several African countries.

“Our advocacy is to please take out the regulatory constraint out of the ecosystem… If the sending requirement and the receiving requirement are harmonised, it becomes easier to transfer money,” she explained.

Mensah also highlighted licensing difficulties faced by financial technology companies seeking to expand their operations across African countries. She explained that payment service providers are often required to obtain separate licences in each market, despite offering similar services.

“We do not have such licence passporting agreements yet in Africa. However, there are country central banks that have already started,” Mensah said, referring to cooperation involving Ghana and Rwanda, as well as Kenya and Rwanda.

She added that AfricaNenda is advocating greater alignment of licensing, customer due diligence and compliance regulations to facilitate the expansion of instant cross-border payment services.

Mensah clarified that the assessment does not constitute an agreement already adopted by African governments. She explained that implementing the proposed framework would require commitment at the African Union level, followed by cooperation among central banks and national financial regulators.

AU explains continental approach

Addressing participants during the Nairobi dialogue, the Head of Economic Policy and Sustainable Development at the African Union Commission, Dr. Patrick Ndzana Olomo clarified that the objective was not to establish a new payment system or replace existing initiatives, including PAPSS. 

He said the initiative seeks to establish regulatory conditions that would allow existing and emerging payment systems to operate more effectively across national borders.

“We are not central banks…we are only facilitators to make sure that things move smoothly,” Dr Olomo explained.

The African Union Commission and AfricaNenda are working with regulators and other stakeholders to advance the proposed framework. 

The initiative is aligned with the African Union's Agenda 2063 and the African Continental Free Trade Area, AfCFTA, which seek to strengthen economic integration and facilitate trade across the continent.

This article was first published in The Guardian Post Edition No:3953 of Wednesday October 28, 2026