The Central Bank of Nigeria (CBN) has directed all banks operating in the country to adopt the Pan-African Payment and Settlement System (PAPSS) and commence originating transactions under the new framework, as part of efforts to deepen intra-African trade and improve cross-border payment efficiency.
According to a statement on Monday by Mrs Hakama Sidi Ali, the CBN’s Acting Director of Corporate Communication, this directive follows the CBN’s recent announcement of a significant review of documentation requirements for PAPSS transactions in Nigeria.
In a circular referenced TED/FEM/PUB/FPC/001/006, issued on April 28, 2025, the apex bank outlined key changes aimed at promoting greater participation by banks, exporters, importers, and individuals.
Launched in January 2022 by Afreximbank in partnership with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS serves as a centralized platform that enables instant, secure, and efficient cross-border transactions across Africa.
It allows for payments to be made in local currencies, thereby reducing reliance on third-party currencies like the U.S. dollar, minimizing transaction costs, and supporting the expansion of trade under the AfCFTA.
Key changes under the new policy
- According to the CBN, one of the major highlights of the new policy is the simplification of documentation for low-value transactions. Individuals conducting transactions up to $2,000 or its naira equivalent, and corporates up to $5,000 equivalent, can now use basic Know Your Customer (KYC) and Anti-Money Laundering (AML) documents previously submitted to their Authorized Dealer Banks (ADBs). For transactions above these thresholds, however, all existing documentation requirements as stipulated in the CBN Foreign Exchange Manual and other circulars remain mandatory.
- The circular also states that applicants are responsible for ensuring that all regulatory documents required for clearing goods are provided to the relevant government agencies. In a move aimed at boosting market-driven forex sourcing, the CBN announced that Authorized Dealer Banks may now source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market without direct recourse to the CBN.
- In addition, the CBN mandated that all export proceeds repatriated via PAPSS must be duly certified by the processing banks to ensure compliance with existing export regulations.
- The apex bank urged exporters, importers, and individuals to familiarise themselves with the revised requirements and leverage PAPSS for their cross-border transactions, noting that the initiative will enhance financial inclusion and operational efficiency.
- The full circular and further information on the revised documentation requirements can be accessed via the official CBN website.
What this means
The CBN’s latest move signals a push to fully integrate Nigerian banks and businesses into Africa’s evolving payment ecosystem.
- By encouraging the use of PAPSS, the regulator aims to strengthen intra-African trade flows, reduce the cost and time associated with cross-border transactions, and lower Nigeria’s dependence on foreign currencies like the dollar for regional trade.
- For banks, this means adjusting their payment infrastructure to originate and process PAPSS transactions in compliance with the new documentation rules.
- Exporters and importers will also benefit from faster transaction settlements in local currencies, but must ensure they comply with simplified and full documentation requirements depending on transaction size.
Overall, the adoption of PAPSS is expected to make cross-border payments more accessible, efficient, and cost-effective for Nigerian businesses and individuals engaging within the African continent.
