Regulatory Barriers to the Pan-African Payment and Settlement System (PAPSS) under AfCFTA: Multi-Country Analysis for Enhanced Intra-African Trade

Abstract:   [1] Purpose – The Pan-African Payment and Settlement System (PAPSS) is critical to realising the African Continental Free Trade Area (AfCFTA), yet adoption remains patchy and uneven. This study interrogates the regulatory frictions that slow PAPSS uptake in Rwanda, Ghana, Kenya and Nigeria and quantifies the opportunity cost of inaction for the wider continent’s trade agenda. [2] Design/methodology/approach – We integrate institutional, diffusion-of-innovation and resource-dependence theory within a mixed-methods design. An AI-assisted content analysis of more than 80 statutory texts produces a six-dimension Regulatory Readiness Index (RRI), while an augmented Poisson gravity model, calibrated with World Bank and Afreximbank data, simulates trade gains under alternative cost-reduction scenarios.  [3] Findings – Currency-convertibility restrictions, divergent KYC/AML thresholds and data-localisation clauses emerge as the most binding constraints. RRI scores range from 56.7 (Nigeria) to 65.0 (Kenya), explaining cross-country variance in early PAPSS transaction volumes. Full PAPSS roll-out coupled with moderate regulatory harmonisation could trim average payment costs by 40–50 %, raising bilateral intra-African trade by 10–30 % within the next decade.  [4] Research implications – By empirically isolating how coercive, mimetic and resource logics condition payment-system diffusion, the paper advances theorisation of fintech integration in emerging markets and offers a replicable AI-enhanced methodology for regulatory benchmarking.  [5] Practical implications – Policymakers should prioritise phased FX liberalisation, mutual KYC recognition and a pan-African fintech-passport regime; without these reforms, AfCFTA’s digital-trade protocol risks under-delivery.  [6] Originality/value – This is the first multi-country investigation to fuse AI-driven regulatory analytics with econometric trade modelling, delivering an evidence-based roadmap for an interoperable African payments union and a template for future digital-trade research.