The Central Bank of Nigeria (CBN) has announced a review of the documentation requirements for transactions conducted through the pan-African payment and settlement system (PAPSS).
PAPSS is a cross-border financial market infrastructure enabling payment transactions across Africa, bridging trade challenges in a continent with over 41 known currencies.
In a statement on Monday, Hakama Sidi-Ali, acting director of corporate communications at the CBN, said the move is part of efforts to boost operational efficiency and support Nigeria’s participation in the African Continental Free Trade Area (AfCFTA).
“The Central Bank of Nigeria is pleased to announce a significant review of the documentation requirements for transactions conducted through PAPSS in Nigeria,” Sidi-Ali said.
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She said PAPSS, launched in January 2022 by Afreximbank in partnership with the African Union and the AfCFTA secretariat, serves as a centralised platform enabling instant, secure, and efficient cross-border transactions across Africa.
“By facilitating payments in local currencies, PAPSS minimises reliance on third-party currencies, reduces transaction costs, and supports the rapid expansion of trade under the AfCFTA,” she said.
Sidi-Ali urged banks to adopt PAPSS and begin originating transactions under the new guidelines while encouraging individuals, exporters, and importers to familiarise themselves with the requirements and leverage PAPSS for transactions within the continent.
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“These reforms are evidence of the CBN’s unwavering commitment to enhancing trade integration and ensuring Nigeria plays a leading role in Africa’s emerging single market,” she said.
‘KYC, AML DOCUMENTS NEEDED FOR TRADE’
In a related circular referenced TED/FEM/PUB/FPC/001/009 and issued on March 12, 2024, Musa Nakorji, director of the trade and exchange department, outlined the detailed guidelines for implementing the new policy.
According to Nakorji, individuals conducting PAPSS transactions below $2,000 and corporates below $5,000 (or the naira equivalent) can now use basic know your customer (KYC) and anti-money laundering (AML) documents previously provided to their authorised dealer banks (ADBs).
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“For transactions above these thresholds, all documentation requirements stipulated in the CBN Foreign Exchange Manual and extant circulars shall apply,” he said.
Nakorji added that applicants would be responsible for ensuring the availability of regulatory documents required by relevant government agencies for the clearance of goods.
In another key change, the apex bank said authorised dealer banks are permitted to source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market, without recourse to the CBN.
“All export proceeds repatriated under PAPSS shall be subject to certification by the respective processing banks,” Nakorji said.
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The CBN said the adjustments are aimed at enhancing Nigeria’s trade competitiveness while reducing transaction costs and paperwork for cross-border payments.
In 2024, the apex bank removed the limits and restrictions on transactions on the PAPSS.
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