The Pan-African Payment and Settlement System (PAPSS), launched in January 2024, is a centralized payment infrastructure designed to facilitate faster and more cost-effective cross-border trade transactions in local African currencies. It was adopted as a key mechanism to support the implementation of the African Continental Free Trade Area (AfCFTA).
Following the successful completion of Africa's first PAPSS transaction between Nigeria and Ghana in 2022, the Federal Government of Nigeria, through the Central Bank of Nigeria (CBN), has continued to show strong commitment to promoting wides adoption of the system. Notably in March 2024, the CBN lifted the quarterly transaction limits it had previously imposed on PAPSS transactions, further reinforcing its support for the system.
Continuing in this direction, on April 28, 2025, the CBN issued a Circular on the Review of Documentation Requirements for PAPSS Transactions in Nigeria (the "Circular").
What's New?
Under the Circular:
- Authorised Dealer Banks may now process PAPSS transactions below US$2,000 for individuals, and US$5,000 for corporates monthly using basic KYC (Know-Your-Customer) and AML (Anti-Money Laundering) documentation provided by the customer.
- Transactions above these thresholds must comply with the documentation requirements set out in the CBN Foreign Exchange Manual and other applicable circulars.
Potential Impact
This policy directive is expected to significantly ease the transaction process for Nigerian SMEs by reducing associated paperwork and enabling faster, more seamless intra-African trade payments.
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