By Bunmi Yekini
The Central Bank of Nigeria (CBN) has issued a new circular easing documentation requirements for transactions conducted through the Pan-African Payment & Settlement System (PAPSS), a move expected to significantly boost trade under the African Continental Free Trade Area (AfCFTA).
The directive, released on April 28, 2025, allows Nigerians and local businesses to conduct PAPSS transactions with simplified Know Your Customer (KYC) and Anti-Money Laundering (AML) documentation. Individuals can now process payments up to \$2,000 per month, while corporates can go up to \$5,000 monthly, with only basic verification documents.
This development is particularly aimed at benefiting Small and Medium Enterprises (SMEs) by reducing bureaucratic bottlenecks that often slow cross-border payments.
Mike Ogbalu III, CEO of PAPSS, praised the move, describing it as a “transformational milestone” for Nigerian commerce and Africa’s economic integration.
“We are grateful to the Central Bank of Nigeria for its unwavering support and vision in propelling Nigeria towards seamless intra-African payments under the AfCFTA,” Ogbalu said.
“This bold policy move will empower banks, businesses, and entrepreneurs to connect, trade, and pay more easily than ever before.”
Under the new framework, commercial banks are also permitted to source foreign exchange for PAPSS transactions through Nigeria’s Foreign Exchange market, a step expected to ease liquidity concerns and encourage adoption.
Currently, PAPSS operates in 16 African countries with over 150 commercial banks, including 22 banks in Nigeria, and 14 payment switches. The system enables real-time, local-currency settlements for cross-border transactions across Africa.
Ogbalu added that Nigerian banks are expected to integrate PAPSS into their digital platforms, such as mobile apps and online banking portals, to broaden accessibility.
“PAPSS is at the forefront of the African advancement towards a truly borderless African economy,” he said. “We encourage all stakeholders across the continent to follow in Nigeria’s footsteps, embrace PAPSS, and become part of the transformation.”
The CBN’s move is seen as part of broader efforts to position Nigeria as a key player in intra-African trade and economic cooperation.