Cross-border instant payments in Africa are at a turning point, shifting from identifying problems to implementing concrete solutions, says Dr Patrick Ndzana Olomo, an economic expert and researcher who serves as Head of Economic Policy and Sustainable Development Division at the African Union Commission in Addis Ababa, Ethiopia.

In this interview with AfricaNenda’s Media Lead, Jude Fuhnwi, he explains that Africa's payment landscape has been fragmented, with over 40 currencies, differing regulations, and non-interoperable systems that created high costs, limited formal remittances, and hindered trade under the African Continental Free Trade Area (AfCFTA) – until a November 28, 2025, decision by the Assembly of Governors of the Association of African Central Banks accelerated momentum towards a Payment Services Directive for Africa (PSDA). Read on:

Q. Dr Ndzana, how would you assess cross-border payments in Africa now?

We are at a pivotal moment, moving from diagnosis to action. Reality has been the "critical problem": over 40 currencies, more than 55 different sets of payment rules, and systems that simply do not talk to each other. The State of Inclusive Instant Payment Systems (SIIPS) in Africa 2023 report confirms this and highlights expensive formal remittance corridors, inaccessible business to business options, and heavy reliance on informal methods. This fragmentation is a direct tax on African trade and a daily barrier to the African Continental Free Trade Area (AfCFTA). The diagnosis is complete. Political will is now translating into concrete action. On 28 November 2025, the Assembly of Governors of the Association of African Central Banks (AACB) instructed its task force on payment systems integration to lead the process to harmonize regulation. We are no longer asking "why"; we are now firmly in the "how," with a clear owner of this agenda within Africa's central banking community.

Q. What can be done to make cross-border payment systems more accessible for rural populations and small businesses in Africa?

It is the ultimate test of our success. The solution lies in building the right "regulatory plumbing" through the Payment Services Directive for Africa (PSDA). The PSDA is designed to harmonize policy and regulatory frameworks and facilitate instant digital retail payments across borders. For a small business owner or a rural farmer, this means moving from a maze of expensive, inaccessible formal channels to a system where paying a supplier across a border is as easy as a domestic transaction. Our consultations with stakeholders, including the United Nations Capital Development Fund (UNCDF), have reinforced the need for a pragmatic approach that categorizes African markets into typologies - leaders in transition, those ready to start, and those developing foundational elements. This "readiness-based approach" ensures we meet countries where they are and provide tailored support, so that the benefits of harmonization reach the most underserved, and not just the well-connected.

Q. From where you sit at the African Union, what is the status of harmonizing payment service regulations across member states?

They are moving from concept to execution. The PSDA has received three high-level endorsements: first from the Specialised Technical Committee (STC) in Yaoundé, then from the STC in Tunis in 2024, and now the catalytic mandate from the AACB Governors in November 2025. We have moved beyond intention to implement. A feasibility study was launched in June 2025 and is now in its final stages; providing tangible analysis on costs, benefits, and use cases. We have a report from consultations with seven key institutions (AACB, PAPSS, UNECA, etc.) completed between February and July 2025. And we have a governance structure anchored in the AACB. This isn't an African Union Commission or AfricaNenda project anymore; it is Africa's project, owned by its central banks.

Q. How can current national payment service regulations move to address existing fragmentation and facilitate instant and inclusive cross-border payments?

The key is a pragmatic, phased approach that respects different national starting points while building toward a common goal. The first phase is a foundation that harmonizes what is essential for basic interoperability: common categories for providers, baselines for consumer protection, and aligned Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) requirements. Phase two is a variable geometry. We must allow regions that are more advanced, like the West African Monetary Zone or the East African Community, to move faster, while others follow with tailored capacity support – as advised by UNCDF. The third phase is a principles-based framework where the PSDA will focus on harmonized outcomes, not uniform technical rules. This gives national regulators the flexibility to implement within local contexts, ensuring the system is both interoperable and innovation-friendly. We are not replacing national systems; we are giving them a common language to speak to one another.

Q. How does the African Union ensure that payment policies and regulations benefit rural populations in the continent?

This is hardwired into our mandate. The Specialized Technical Committee's instructions to the African Union Commission (AUC) and AfricaNenda were explicit: develop a PSDA that "supports economic integration" and, critically, "enhances financial inclusion. " This is not an afterthought; it is a core pillar of the PSDA's rationale. Our consultations are deliberately broad. We are engaging not just central banks, but organizations like the GSMA, to address data privacy and infrastructure challenges for mobile money users, and UNCDF, for critical inputs on financial inclusion. By embedding the AfCFTA Secretariat into the PSDA Taskforce, we ensure every regulatory discussion is informed by the real-world needs of traders, including informal cross-border operators who are the lifeblood of many rural economies. We are also linking this work to the African Union's Decade of Women's Financial and Economic Inclusion, ensuring the framework serves all Africans.

Q. How is the collaboration between the African Union and AfricaNenda fostering regional payment systems?

The AUC and AfricaNenda have a strong, structured partnership built on a joint policy advocacy program that began in 2023. We co-chair the PSDA Taskforce, which is the operational body turning policy into action. In this collaboration, the AUC provides political stewardship, ensuring alignment with broader AU agendas like the Digital Transformation Strategy for Africa and maintaining accountability to the Specialised Technical Committee. AfricaNenda provides crucial technical support, including leading the feasibility study and advancing advocacy and capacity development efforts.

Q. What efforts are in place to address the conflicting national interests of individual countries?

We ground everything in evidence. The PSDA feasibility study is critical to demonstrate the concrete benefits of integration for individual countries, moving the conversation from abstract policy to a compelling, country-specific value proposition. We also anchor ownership within the central banking community by placing technical leadership on the AACB Task Force. By so doing, we ensure the process is driven by peers who understand the national sensitivities and can build consensus through dialogue. Lastly, we are building a dynamic and adaptable framework. Stakeholders from the Pan-African Payment and Settlement System (PAPPS) and United Nations Economic Commission for Africa have stressed the need for a framework that can evolve with technology and policy. This allows countries to move at their own speed and reduces concerns about a one-size-fits-all model. We are building a coalition of the willing, demonstrating success that others will want to join.

Q. From your experience, what misconception do Africans often have about cross-border payments?

The persistent misconception is that initiatives like the PSDA are about building a new, top-down payment system or piece of infrastructure. I hear this often: "Is this another switch like PAPSS?" The answer is a definitive no. The PSDA is not a new system; it is the common rulebook, the harmonized regulatory framework. During our consultations, PAPSS themselves highlighted the need to clearly articulate what the PSDA is and is not to avoid this very confusion. It is the set of standards that allow our existing systems - whether it's PAPSS, national switches, or mobile money platforms - to finally connect seamlessly, securely, and affordably. We correct this by communicating with discipline in every forum: The PSDA is the piece that makes the other pieces work. It's the foundation, not another building. We are building the regulatory layer that enables the infrastructure we already must deliver on its promise for every African.