The Central Bank of Nigeria (CBN) has announced that authorised dealer banks can now independently source foreign exchange for Pan-African Payment and Settlement System (PAPSS) through the Nigerian Foreign Exchange Market (NFEM), without recourse to the apex bank.
The development was disclosed in a statement signed by Hakama Sidi Ali, acting director of Corporate Communications at the CBN on Monday, which also unveiled revised documentation requirements for PAPSS transactions in Nigeria. The move, according to the Bank, forms part of its ongoing efforts to promote seamless intra-African trade, enhance financial inclusion, and improve operational efficiency for Nigerians conducting cross-border payments within the continent.
Read also: CBN eases cross-border payment rules to boost intra-African trade
Launched in January 2022 by Afreximbank in collaboration with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS is a centralised payment and settlement infrastructure designed to enable instant, secure, and efficient cross-border transactions across Africa. By facilitating transactions in local currencies, PAPSS reduces dependence on third-party currencies, lowers transaction costs, and underpins the rapid expansion of trade activities under the AfCFTA framework.
In a circular referenced TED/FEM/PUB/FPC/001/006 and dated April 28, 2025, the CBN outlined key changes to the documentation requirements associated with PAPSS transactions. “This adjustment is necessary to streamline processes, encourage broader adoption of PAPSS, and strengthen Nigeria’s role in facilitating intra-African trade,” the statement said.
Under the new guidelines, customers conducting low-value transactions can now rely on basic Know Your Customer (KYC) and Anti-Money Laundering (AML) documentation already provided to their authorised dealer banks. Specifically, individuals undertaking transactions up to USD 2,000 equivalent in Naira and corporate entities engaging in transactions up to USD 5,000 equivalent are eligible for this simplified documentation regime. For transactions exceeding these thresholds, the full suite of documentation as stipulated in the CBN Foreign Exchange Manual and associated circulars remains mandatory.
The CBN further clarified that applicants bear the responsibility of ensuring all required regulatory documents are available to facilitate the clearance of goods, as mandated by relevant government agencies. “Applicants must ensure compliance with existing regulations to avoid delays in transaction processing,” the circular noted.
In addition, the circular confirmed that authorised dealer banks are now permitted to source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market, eliminating the need for prior recourse to the CBN. This measure is expected to further deepen liquidity in the domestic foreign exchange market and enhance the efficiency of cross-border payment settlements.
Read also: CBN raises N1trn in oversubscribed OMO auction
Export proceeds repatriated via PAPSS will be required to undergo certification by the relevant processing banks, according to the new policy.
The Central Bank called on all authorised banks to adopt PAPSS and commence originating transactions in accordance with the revised guidelines. In a broader appeal, the CBN urged exporters, importers, and individuals engaged in intra-African trade to familiarise themselves with the updated requirements and leverage PAPSS for cross-border transactions.
