Lagos: The Central Bank of Nigeria (CBN) has announced a significant review of the documentation requirements for transactions conducted through the Pan-African Payment and Settlement System (PAPSS) in Nigeria. Hakama Sidi-Ali, CBN’s Acting Director, Corporate Communications Department, stated that the initiative is part of CBN’s ongoing commitment to foster seamless intra-African trade and financial inclusion, while also boosting operational efficiency for Nigerians engaging in cross-border payments within Africa.
According to News Agency of Nigeria, the initiative was inaugurated by Afreximbank in partnership with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat in January 2022. Sidi-Ali highlighted that PAPSS serves as a centralised payment and settlement platform that enables instant, secure, and efficient cross-border transactions throughout Africa. By facilitating payments in local currencies, PAPSS minimizes reliance on third-party currencies, reduces transaction costs, and supports the rapid expansion of trade under the AfCFTA.
Sidi-Ali further explained that applicants are responsible for ensuring that all regulatory documents are available to facilitate the clearance of goods, as required by relevant government agencies. Authorized Dealer Banks may now source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market without recourse to the CBN. All export proceeds repatriated via PAPSS shall be certified by the relevant processing banks. The CBN urges all banks to adopt PAPSS and commence originating transactions in line with this new policy. Additionally, the CBN encourages exporters, importers, and individuals to familiarize themselves with the new requirements and leverage PAPSS for cross-border transactions within Africa.
The News Agency of Nigeria recalls that in a circular issued on April 28, the CBN outlined the key changes to the documentation requirements associated with PAPSS transactions. The circular introduced changes such as simplified documentation for low-value transactions, allowing customers to use basic KYC and AML documents provided to their Authorized Dealer Banks for low-value transactions, ranging between 2,000 and 5,000 dollars equivalent in Naira for individuals and corporate respectively. Transactions above these thresholds require all documentation as stipulated in the CBN Foreign Exchange Manual and related circulars.