CBN simplifies documentation for Pan-African Payment System

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The Central Bank of Nigeria (CBN) has introduced revised guidelines for the Pan-African Payment and Settlement System (PAPSS), aimed at facilitating seamless intra-African trade and financial inclusion. The new documentation requirements are designed to support the rapid expansion of trade under the African Continental Free Trade Area (AfCFTA).

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According to the CBN, the revised guidelines will enable payments in local currencies, minimise reliance on third-party currencies, and reduce transaction costs. The PAPSS, launched in January 2022, is a centralised payment and settlement platform that enables instant, secure, and efficient cross-border transactions throughout Africa.

Key changes to the documentation requirements include:

– Simplified documentation for low-value transactions, allowing customers to use basic KYC and AML documents for transactions below $2,000 (individuals) and $5,000 (corporates).

– Authorized dealer banks can source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market without recourse to the CBN.

– Export proceeds repatriated via PAPSS must be certified by the relevant processing banks.

The CBN emphasized that applicants are responsible for ensuring all regulatory documents are available to facilitate the clearance of goods, as required by relevant government agencies. These changes are part of the CBN’s ongoing commitment to foster seamless intra-African trade, financial inclusion, and operational efficiency for Nigerians engaging in cross-border payments within Africa.