The Central Bank of Nigeria (CBN) has directed all commercial banks to adopt the Pan-African Payment and Settlement System (PAPSS) and begin originating transactions through the platform.
According to a statement issued on Monday by Mrs. Hakama Sidi Ali, the Acting Director of Corporate Communications at the Central Bank of Nigeria (CBN), the directive mandating banks to adopt the Pan-African Payment and Settlement System (PAPSS) aligns with the CBN’s recent review of documentation requirements for PAPSS transactions in the country.
In a circular referenced TED/FEM/PUB/FPC/001/006, issued on April 28, 2025, the apex bank detailed a series of changes designed to enhance participation by banks, exporters, importers, and individuals.
Launched in January 2022 by Afreximbank in collaboration with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS functions as a centralized payment infrastructure that facilitates instant, secure, and efficient cross-border transactions across Africa. By enabling settlements in local currencies, PAPSS helps reduce reliance on third-party currencies such as the U.S. dollar, cuts transaction costs, and strengthens the continent’s drive toward economic integration under the African Continental Free Trade Area.
According to the CBN, one of the major highlights of the new policy is the simplification of documentation for low-value transactions. Individuals conducting cross-border transactions up to $2,000 or its naira equivalent, and corporates up to $5,000, can now rely on basic Know Your Customer (KYC) and Anti-Money Laundering (AML) documents previously submitted to their Authorized Dealer Banks (ADBs). However, for transactions exceeding these limits, existing documentation requirements under the CBN Foreign Exchange Manual remain applicable.
The circular also emphasized that applicants must ensure all regulatory documents for clearing goods are provided to the relevant government agencies. In a bid to promote a more market-driven forex sourcing, the CBN further said that Authorized Dealer Banks may now source foreign exchange for PAPSS settlements from Nigerian Foreign Exchange Market without seeking funds directly from the CBN.
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 acquaint themselves with the updated requirements and take full advantage of PAPSS to enhance cross-border trade, financial inclusion, and operational efficiency. Full details are available on the CBN’s official website.
The CBN’s latest directive signals its drive to fully integrate Nigerian banks and businesses into Africa’s expanding payment landscape. By embracing the adoption of PAPSS, cross-border transactions are expected to become more accessible, efficient, and cost-effective for Nigerian businesses and individuals operating across the continent.
