Tinubu sounds alarm: Global Protectionism threatens Africa, PAPSS is our Shield

By Kazeem Ugbodaga

President Bola Tinubu on Friday warned of the perils of global protectionism and championing the Pan-African Payment and Settlement System (PAPSS) as a cornerstone for Africa’s economic resilience.

Speaking to a distinguished assembly of African leaders and global stakeholders, in a compelling keynote address at the 32nd Annual Meetings of the African Export-Import Bank (Afreximbank) in Abuja, Tinubu declared, “As the world becomes increasingly fragmented—with rising protectionism and shifting trade dynamics—Africa must double down on its institutions and capabilities.”

Hosted in Nigeria, Africa’s most populous nation, the meetings themed “Building the Future on Decades of Resilience” provided a platform for Tinubu to advocate for financial independence and intra-African trade.

He emphasized PAPSS, which Nigeria has formally approved, as “a significant step towards financial independence.”

Tinubu explained, “PAPSS enables cross-border trade in local currencies, reducing reliance on foreign exchange and promoting economic stability.”

He urged African nations to adopt it, asserting, “I urge all African nations to embrace PAPSS because deeper financial integration strengthens our collective resilience.”

Tinubu’s address framed rising global protectionism as a critical challenge, warning that “the world will not wait for Africa; a united and purposeful Africa can define its destiny.”

He positioned PAPSS and Afreximbank’s broader initiatives as vital countermeasures to external trade barriers, which threaten Africa’s economic progress.

“In the face of rising protectionism and shifting trade dynamics, it’s more important than ever that we stand together, united in our commitment to Africa’s development and prosperity,” he said, calling for a unified strategy to safeguard the continent’s economic interests.

Tinubu highlighted Nigeria’s reforms under his Renewed Hope Agenda since May 2023 as a blueprint for navigating global economic challenges.

“We removed the long-standing fuel subsidy and unified our exchange rate system,” he said, acknowledging their difficulty but necessity to “correct systemic distortions.”

These reforms have yielded results, with Tinubu stating, “In 2024, Nigeria recorded 3.4% GDP growth with broad sectoral contributions,” alongside a rebound in oil production to 1.5 million barrels per day and a decline in debt servicing from 96% to below 65% of revenue.

He emphasized PAPSS’s role in stabilizing Nigeria’s economy, noting that trading in local currencies reduces foreign exchange pressures, a critical issue amid global protectionist policies.

“Let us fully adopt PAPSS to reduce costs, conserve foreign reserves, and empower SMEs,” Tinubu urged, linking the system to broader economic empowerment.

Nigeria’s collaboration with Afreximbank, including over $52 billion in support for energy, agriculture, and infrastructure, was presented as a bulwark against external economic pressures.

Tinubu cited projects like the Dangote and BUA Refineries and the $3.5 billion Bakassi Deep Seaport, which “enhance trade infrastructure and market access.”

The upcoming Africa Energy Bank, headquartered in Abuja with $5 billion in initial capital, was highlighted as a response to global energy market volatility, with Tinubu noting it will “finance Africa’s energy transition—leveraging gas, renewables, and clean technologies.”

Through platforms like the Fund for Export Development in Africa (FEDA) and the Creative Africa Nexus (CANEX), Tinubu emphasized that “our partnership with Afreximbank is not just about financing. It’s about fostering African entrepreneurship, elevating quality standards, and scaling SMEs in creative and export-driven industries.”

These initiatives, he argued, position Africa to compete despite protectionist barriers.

Tinubu’s closing remarks outlined a four-point agenda to counter global protectionism: adopting PAPSS, strengthening Afreximbank’s financial support, prioritizing intra-African trade as “a strategic pathway for growth, jobs, and industrial value chains,” and empowering youth and women as “architects of a new African century.”

He urged, “Let us treat intra-African trade not as a goal but as a strategic pathway,” emphasizing its role in building resilience against global trade disruptions.

Concluding with a call to action, Tinubu said, “Let us remember these meetings for the bold steps, catalytic investments, and firm commitments they produce. Let history record that African leaders chose to shape new realities in this room.”