10/8/2025–|Last update: 15:10 (Mecca time)
Algeria, by joining the unified African Paas and Settlement System (PAPSS), takes a new step within a policy through which it is betting on strengthening its economic presence within the continent, deepening partnership with African countries, leading to the achievement of African integration.
Algeria, by joining this system, becomes among more than 15 countries distributed over 4 African regions, which was quick to adopt the regional payment mechanism that allows the settlement of commercial transactions in local currencies, within a growing banking network that includes more than 115 commercial banks and 10 central banks, in a collective endeavor to establish an African financial structure independent of the Western financial system.
The system, which is officially launched by the African Bank for Import and Export in cooperation with the African Union in 2022, is one of the basic financial tools to activate the African continental free trade area, as it allows member states to settle their commercial transactions in local currencies, without the need to pass through the Western financial system or the use of the dollar and the euro, which enhances the financial sovereignty of the continent and speeds up the implementation of the continental free trade area.
The motives for joining
And Algeria, by joining “Babs”, is betting on opening new paths for trade exchange with its partners on the continent, facilitating the movement of capital, and reducing time and financial costs, in a move that reflects its endeavor to enhance practical engagement in the continental integration path.
Economist Huawei Tigres believes that Algeria’s accession to the unified African payment system carries deep economic connotations, and reflects a clear desire to enhance inter -trade within the continent, and to expand Algerian exports towards African markets, within a broader endeavor to diversify the national economy away from the oil.
Tugsisi, in his interview with Al -Jazeera Net, indicates that the new system is paving to overcome the obstacles that have long been causing financial transactions on the continent, foremost of which is excessive dependence on foreign currencies such as dollar and the euro, which constitutes a financial burden on African countries, especially when it comes to transferring payments or settling transactions through traditional banks.
Tigres adds that the use of local currencies, including the Algerian dinar, opens the door to immediate settlements, at a lower cost, and a higher speed, which would enhance the smoothness of trade exchanges, and support Algeria’s integration into the continental financial system.
African openness
In the same context, Tigrce considers that this step is consistent with Algeria’s tendency to activate the continental free trade zone agreement, which is still the inter -trade between its countries below 15% of the total trade exchange, a rate it sees out of the actual capabilities of the continent.
The expert stresses that Algeria, through this engagement, aims to enable its companies to enter new markets and expand the activity of its banks regionally, in a way that enhances the Algerian financial presence inside Africa, and supports South-South economic integration, through more flexible and lower cost payment mechanisms, which is due to the direct benefit on the African citizen and the growth rates in member states.
In the context of the accelerated openness to the continental market, economist Jamal Al -Din Nofal, Nawfal, Sherif, confirms that Algeria’s accession to the unified African payment system represents an episode of a series of reforms aimed at creating real economic integration within the continent, based on the activation of electronic payment and modernization of the disposable legislation.
A Shurif adds, in an interview with Al -Jazeera Net, that the Algerian authorities have already begun to download this vision through the new exchange law, and the expansion of electronic payment circles, not only across the banking sector, but through various institutions and sectors, foremost of which is trade, in a way that enhances the volume of exchanges and pushes towards diversifying the economy away from fuel.
A Shurif believes that the trend towards adopting local currencies inside Africa will provide a climate of favorable business, and facilitate the entry of investors to the local and African market, which provides a real strategic privilege for Algeria and its partners alike.
Activation challenges
Despite the importance of the step, a disobedient indicates that activating this system raises structural challenges, on top of which is how to secure and ensure the progress of this process, to overcome the imbalances that local exporters faced previously through dealing with foreign currency, and the vast difference between the official and parallel market, especially with regard to the exchange rate of foreign currency. In addition to ensuring that the rest of the African countries join this system effectively and completely.
He stresses the necessity of accompanying this system by expanding free exchange areas with more African countries, and creating commercial corridors or what it described as “green greenery” to facilitate and accelerate the crossing of goods, especially in light of the trade factor and its management, which is provided by the “Babs” system by accelerating the pace of payment.
The expert says that the unified payment system alone is not enough, unless effective marketing policies are accompanied by Algerian products, and a vision that provides a wider involvement in African markets as soon as possible.
For his part, Professor Fares Habbash, Professor of Economics at the University of Setif, connects the success of Algeria’s accession to the unified African payment system, the first of which is the country’s ability to create its banking infrastructure, and modernize its electronic systems of actual integration with the platform.
Habbash stresses, in an interview with Al -Jazeera Net, the need to review the legislative framework for electronic payment, and to train banking cadres and economic institutions to use the system and exploit its capabilities.
Habbash considers that the transition from traditional systems to a unified payment system at the continent level is not merely a technical procedure, but rather a deep economic transformation that requires political and financial coordination that exceeds the national borders.
He pointed out that technical readiness is a decisive factor, especially since the system works with an immediate or semi -immediate settlement mechanism, which is based on a interconnected network that includes central and commercial banks and providing payment services, which requires advanced and safe electronic systems capable of reducing the time of implementation of transactions from days to seconds or minutes only.
He praised the economic challenges related to the expansion of the system of benefiting from the system, as the importance of this mechanism lies in its ability to reduce the costs of transactions from an average range between 10% and 30% to only about 1%, which can provide about 5 billion dollars annually to African countries.
But this gain – in his opinion – remains conditional on a real and smooth activation of the system within the local markets, and the extent of the response of economic actors to deal with it.
