CBN Revises PAPSS Documentation Rules to Boost Intra-African Trade

CBN Revises PAPSS Documentation Rules to Boost Intra-African Trade

April 28, 2025 | Abuja – By iReporter Newsroom

In a bold move to deepen cross-border trade within Africa, the Central Bank of Nigeria (CBN) has announced a significant revision to the documentation requirements for transactions conducted via the Pan-African Payment and Settlement System (PAPSS).

This development, outlined in a circular dated April 28, 2025 (ref: TED/FEM/PUB/FPC/001/006), reflects the apex bank’s continued push to enhance financial inclusion, reduce trade barriers, and support the objectives of the African Continental Free Trade Area (AfCFTA).

PAPSS, launched in 2022 by Afreximbank in collaboration with the African Union and AfCFTA Secretariat, provides a centralized platform for real-time, secure cross-border transactions across the continent — all in local currencies. The system eliminates the need for third-party currencies like the U.S. dollar, reducing transaction costs and accelerating trade flow within Africa.

Key Highlights of the New Guidelines:

• Simplified Documentation for Low-Value Transactions:
  Individuals transacting up to $2,000 and corporates up to $5,000 (Naira equivalent) can now rely on basic Know-Your-Customer (KYC) and Anti-Money Laundering (AML) documents previously submitted to their Authorized Dealer Banks (ADBs). However, full documentation remains mandatory for higher-value transactions in accordance with the CBN Foreign Exchange Manual.

• Applicant Responsibility:
  The CBN emphasized that applicants bear the responsibility for providing all regulatory documentation necessary for clearing goods with relevant government agencies.

• FX Sourcing Flexibility:
  Authorized Dealer Banks are now permitted to source foreign exchange for PAPSS transactions directly from the Nigerian Foreign Exchange Market, eliminating dependency on the CBN for such settlements.

• Export Proceeds Certification:
  Export earnings repatriated through PAPSS must be duly certified by the relevant processing banks.

The Central Bank has directed all banks to begin processing PAPSS transactions under the revised framework and urged exporters, importers, and individuals to align with the new policy for efficient cross-border trade.

This policy adjustment is expected to fast-track Nigeria’s integration into the continental trade ecosystem and ease financial transactions between African countries.

More information is available on the CBN’s official website: www.cbn.gov.ng