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The Central Bank of Nigeria (CBN) has directed all commercial banks in the country to begin originating transactions through the Pan-African Payment and Settlement System (PAPSS). This is reinforcing its commitment to enhancing intra-African trade, financial inclusion, and cross-border payment efficiency.
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The directive was issued via a circular (Ref: TED/FEM/PUB/FPC/001/006) released on April 28, 2025. Accordingly, the new directive is part of the CBN’s revised guidelines for PAPSS transaction documentation. The apex bank emphasized the immediate adoption of PAPSS across Nigeria’s banking system.
What is PAPSS and Why It Matters
PAPSS was launched in January 2022 by Afreximbank, in partnership with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) secretariat. The platform serves as a centralized financial market infrastructure. It enables instant, secure, and low-cost cross-border transactions across African countries.
PAPSS allows payments in local currencies, thereby reducing dependency on third-party currencies like the US Dollar or Euro. This initiative is expected to cut transaction costs, improve liquidity, and facilitate the smooth implementation of the AfCFTA framework.
Revised Documentation Requirements for PAPSS Transactions
The CBN has introduced simplified documentation requirements to encourage PAPSS adoption, particularly for low-value transactions. They include:
- Individuals: Transactions below USD 2,000 (or Naira equivalent)]
- Corporate Entities: Transactions below USD 5,000 (or Naira equivalent)
For such transactions, customers can use basic Know Your Customer (KYC) and Anti-Money Laundering (AML) documents already submitted to their Authorised Dealer Banks (ADBs).
For transactions above these thresholds, the existing documentation rules outlined in the CBN Foreign Exchange Manual and other regulatory circulars remain in force.
Foreign Exchange and Export Proceeds
Under the new PAPSS framework:
- Authorised Dealer Banks are allowed to source foreign exchange for PAPSS transactions directly from the Nigerian Foreign Exchange Market without CBN’s intervention.
- Export proceeds repatriated through PAPSS will be certified by the processing banks.
This shift gives banks more autonomy while ensuring proper regulation and accountability in international trade settlements.
Immediate Compliance Required
The CBN has urged all Nigerian banks to commence originating transactions under the PAPSS system without delay. Exporters, importers, and individuals engaging in cross-border trade within Africa are encouraged to familiarize themselves with the revised guidelines. Adopting PAPSS will improve efficiency and reduced cost.
The directive aligns with the broader goal of positioning Nigeria and the African continent as a digitally connected trade and payment ecosystem, in line with global standards.
