…moves to cut costs
The Central Bank of Nigeria (CBN) has announced a major revision of documentation requirements for transactions conducted via the Pan-African Payment and Settlement System (PAPSS).
This was part of the move to strengthen Nigeria’s role in cross-border trade within Africa and promote faster, more affordable payments across the continent.
The new guidelines, which took effect immediately following a circular issued on April 28, 2025, simplify transaction documentation for individuals and corporates engaged in low-value payments under PAPSS.
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The CBN now allows basic Know Your Customer (KYC) and Anti-Money Laundering (AML) documents already submitted to banks to suffice for transactions up to $2,000 for individuals and $5,000 for corporates.
The regulator’s decision is part of Nigeria’s broader push to operationalise the African Continental Free Trade Area (AfCFTA) and deepen financial integration across the continent by making cross-border transactions more seamless, especially for small businesses, startups, and exporters.
“CBN is committed to enabling smoother intra-African trade, financial inclusion, and operational efficiency,” CBN said in its statement on Monday.
It noted that the relaxed requirements were designed to encourage wider adoption of PAPSS by Nigerian banks, importers, exporters, and individuals.
PAPSS, which was launched in January 2022 by Afreximbank in collaboration with the African Union and the AfCFTA Secretariat, allows instant settlement of cross-border payments in local currencies, reducing dependence on the U.S. dollar or other third-party currencies and lowering costs across trade corridors.
Under the new rules, any transactions above the low-value thresholds will still require full documentation as outlined in the CBN Foreign Exchange Manual.
However, a key shift is that Authorised Dealer Banks (ADBs) are now permitted to source foreign exchange for PAPSS settlements directly from the Nigerian Foreign Exchange Market, without needing recourse to the CBN itself.
This decentralises access to FX liquidity and is expected to speed up transactions while easing pressure on the central bank’s reserves.
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Additionally, all export proceeds repatriated through PAPSS must be certified by the processing banks, a move designed to maintain transparency and accountability as trade volumes increase under the AfCFTA framework.
The apex bank also reminded applicants that they remain responsible for ensuring all regulatory documents are available for goods clearance, aligning PAPSS with national trade and customs protocols.
This policy shift comes at a critical time for Nigeria’s economy, which is seeking to diversify away from oil, navigate US recent tariffs and capitalise on regional trade opportunities.
