CBN Eases Documentation for Low-Value Transactions via PAPSS to Boost Intra-African Trade

In a move designed to strengthen Nigeria’s participation in intra-African trade and streamline cross-border transactions, the Central Bank of Nigeria (CBN) has relaxed documentation requirements for low-value transactions carried out through the Pan-African Payment and Settlement System (PAPSS). The new policy, announced on April 28, 2025, is expected to enhance financial inclusion, reduce transaction costs, and boost the ease of doing business across the continent.

The CBN’s directive, issued through a circular referenced TED/FEM/PUB/FPC/001/006, allows individuals and corporations to use existing Know Your Customer (KYC) and Anti-Money Laundering (AML) documents already provided to their banks for PAPSS transactions up to $2,000 and $5,000, respectively. This eliminates the need for additional paperwork for smaller cross-border transactions, though full documentation is still required for higher-value transactions under current foreign exchange regulations.

PAPSS, which was launched in January 2022 by Afreximbank in collaboration with the African Union and the AfCFTA Secretariat, is a cross-border payment platform that enables real-time transactions across Africa using local currencies. It is a cornerstone infrastructure of the African Continental Free Trade Area (AfCFTA), designed to remove dependence on third-party foreign currencies like the U.S. dollar or the euro. Its adoption supports the goal of building a seamless, single African market.

According to the statement released by CBN’s Acting Director of Corporate Communications, Hakama Ali, the new policy allows authorised dealer banks to source foreign exchange from the local Nigerian market to fund PAPSS settlements without needing prior approval from the central bank. This is intended to simplify the process and reduce delays in payment processing. Despite the relaxed rules for smaller transactions, the CBN emphasized that all requirements outlined in the Foreign Exchange Manual and related circulars remain applicable for other categories of trade and payment activities. Export proceeds channeled through PAPSS must still be certified by the relevant processing banks to ensure compliance with regulatory standards.

The apex bank further encouraged exporters, importers, and financial service users to fully embrace PAPSS fully, urging authorized dealer banks to integrate the system into their operational frameworks. This, the CBN noted, would help businesses across Africa conduct transactions more efficiently, support Nigeria’s trade expansion goals, and align with AfCFTA’s broader agenda of improving continental economic integration. By simplifying the regulatory process for small transactions and reinforcing the use of local currencies, the CBN’s latest initiative is poised to accelerate Nigeria’s digital payment transformation and improve its competitiveness in the African trade community.