The Central Bank of Nigeria (CBN) has directed all banks in the country to immediately adopt the Pan-African Payment and Settlement System (PAPSS) for processing cross-border transactions. This move, announced in a circular dated April 28, 2025, is designed to boost intra-African trade, make payments more efficient, and reduce Nigeria’s reliance on foreign currencies like the US dollar.
PAPSS, launched in 2022 by Afreximbank in partnership with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat, serves as a centralized platform enabling instant, secure, and cost-effective payments across Africa. By allowing transactions in local currencies, PAPSS aims to cut transaction costs and speed up settlements for businesses and individuals trading within the continent.
Key Policy Changes
Simplified Documentation: For transactions up to $2,000 (individuals) and $5,000 (corporates), only basic Know Your Customer (KYC) and Anti-Money Laundering (AML) documents already submitted to banks are required.
Higher-Value Transactions: Transactions above these limits must still comply with full documentation requirements as outlined in the CBN Foreign Exchange Manual.
Foreign Exchange Sourcing: Banks can now source foreign exchange for PAPSS settlements directly from the Nigerian Foreign Exchange Market, without needing CBN approval.
Export Proceeds: All export proceeds repatriated through PAPSS must be certified by the processing banks to ensure compliance.
The CBN is urging exporters, importers, and individuals to familiarize themselves with these new requirements and take advantage of PAPSS for their cross-border transactions. The regulator believes this initiative will make payments faster, cheaper, and more accessible for Nigerian businesses and support the country’s integration into Africa’s growing trade ecosystem.
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