The Central Bank of Nigeria (CBN) has introduced changes to the foreign exchange sourcing and documentation requirements for transactions conducted through the Pan-African Payment and Settlement System (PAPSS) in Nigeria. These adjustments are designed to streamline cross-border transactions within Africa.
A statement issued by the Acting Director of Corporate Communications, Hakama Sidi Ali, confirmed that Authorized Dealer Banks (ADBs) are now allowed to source foreign exchange directly from the Nigerian Foreign Exchange Market for PAPSS settlements, removing the need for CBN intervention. This is expected to improve liquidity and accelerate settlement processes for cross-border payments. The updated guidelines, titled “Revised Documentation Requirements for PAPSS,” are effective immediately.
Key changes include a requirement for all export proceeds repatriated through PAPSS to be certified by the relevant processing banks, ensuring regulatory compliance and transparency in international trade. Additionally, a simplified documentation process has been introduced for low-value transactions. Transactions under $2,000 (or equivalent in naira) for individuals and $5,000 for corporate entities can now be processed with basic Know-Your-Customer (KYC) and Anti-Money Laundering (AML) documents previously submitted to banks. However, transactions above these amounts must adhere to full documentation requirements as outlined in the CBN Foreign Exchange Manual and related circulars.
Applicants are also required to ensure that all regulatory documents for clearing goods are readily available to expedite trade processing and enhance accountability among traders. These changes are part of the CBN’s ongoing efforts to promote smoother intra-African trade, financial inclusion, and operational efficiency for Nigerians involved in cross-border transactions.
PAPSS, which launched in January 2022 by the African Export-Import Bank (Afreximbank) in collaboration with the African Union and AfCFTA Secretariat, facilitates payments in local currencies, reducing reliance on third-party currencies and lowering transaction costs. This system supports the rapid growth of trade under the African Continental Free Trade Area (AfCFTA).
The CBN’s circular, dated April 28, 2025, encourages Nigerian banks to fully adopt PAPSS for originating transactions, urging exporters, importers, and individuals to familiarize themselves with the new requirements and make use of PAPSS for efficient, secure, and cost-effective cross-border payments. These updates are expected to enhance Nigeria’s role in African trade and economic integration.
Source : https://thenationonlineng.net/
