CBN Streamlines PAPSS Documentation Rules to bolster Intra-African Trade Efficiency
In a decisive policy tweak aimed at accelerating the integration of Nigeria into the African Continental Free Trade Area (AfCFTA), the Central Bank of Nigeria (CBN) has revised the documentation requirements for transactions carried out via the Pan-African Payment and Settlement System (PAPSS) — the continent’s flagship cross-border financial infrastructure.
The move, announced in an official circular and affirmed by Hakama Sidi-Ali, CBN’s Acting Director of Corporate Communications, signals Nigeria’s intent to remove friction in intra-African payments, enhance regulatory clarity, and promote greater adoption of the PAPSS platform by businesses and financial institutions.
What Is PAPSS and Why It Matters for Nigeria
Launched in January 2022 by the African Export-Import Bank (Afreximbank) in collaboration with the African Union and the AfCFTA Secretariat, PAPSS was designed to facilitate instant, secure, and cost-effective cross-border payments using local currencies across African markets. It aims to eliminate the need for third-party currencies (especially the US dollar or euro) and slash transaction costs, which have long been a barrier to trade within Africa.
For Nigeria — Africa’s largest economy by GDP and population — seamless adoption of PAPSS is critical to unlocking its AfCFTA competitiveness, particularly for SMEs, fintechs, and manufacturers looking to tap into new markets across the continent.
“This regulatory revision reflects the CBN’s commitment to operational efficiency, financial inclusion, and the deepening of intra-African trade,” said Sidi-Ali.
Key Revisions to PAPSS Transaction Documentation
As outlined in the CBN’s April 28 circular, the core reforms include:
- Simplified documentation for low-value transactions:
- Individuals transacting up to $2,000 (or Naira equivalent) and corporates up to $5,000 may now use existing KYC (Know Your Customer) and AML (Anti-Money Laundering) documents submitted to their Authorised Dealer Banks (ADBs).
- This eliminates the need for complex paperwork for routine trade transactions and remittances.
- Individuals transacting up to $2,000 (or Naira equivalent) and corporates up to $5,000 may now use existing KYC (Know Your Customer) and AML (Anti-Money Laundering) documents submitted to their Authorised Dealer Banks (ADBs).
- For high-value transactions:
- All transactions exceeding these thresholds will still require full documentation, in line with provisions of the CBN Foreign Exchange Manual and relevant circulars.
- All transactions exceeding these thresholds will still require full documentation, in line with provisions of the CBN Foreign Exchange Manual and relevant circulars.
- PAPSS transactions can now be settled through the Nigerian Foreign Exchange Market, with no recourse to CBN intervention — further deepening market liberalisation and decentralisation of forex access.
- Export proceeds repatriated via PAPSS must be certified by the processing bank, preserving compliance integrity and traceability.
Strategic Implications for Nigerian Trade and Finance
This policy shift is not just procedural — it is strategic:
- Boosts Participation in AfCFTA: Reducing documentation hurdles directly lowers the barrier to entry for small traders, startups, and mid-sized businesses seeking to engage across African borders.
- Empowers Banks and Fintechs: By decentralising forex sourcing for PAPSS, the CBN is shifting more autonomy to Authorised Dealer Banks, which could catalyse innovation in digital trade finance products.
- Enhances Financial Inclusion: Lowering transaction documentation burdens will help integrate more individuals and informal enterprises into Africa’s formal trade ecosystem — a critical step toward financial inclusion and poverty reduction.
- Signals Regulatory Maturity: Nigeria’s evolving stance on digital and cross-border payments is increasingly aligned with continental and global best practices, which bodes well for investor confidence.
BRANDECONOMY Insight: A Catalyst, Not a Cure-All
While this revision is a welcome move, experts caution that documentation is only one of many trade barriers in Nigeria and across Africa. Persistent issues such as port inefficiencies, regulatory bottlenecks, forex volatility, and infrastructure gaps remain significant impediments to seamless trade.
Nonetheless, this reform positions PAPSS — and by extension Nigeria — to play a more dominant role in the future of African intra-continental trade. It also reinforces the central bank’s renewed posture under its current leadership, combining regulatory agility with regional ambition.
Bottom Line
The CBN’s revised PAPSS documentation requirements mark a small but strategic win in Nigeria’s effort to make intra-African trade faster, cheaper, and more accessible. For exporters, importers, banks, and digital platforms — the message is clear: Africa is open for business, and Nigeria intends to lead from the front.
