The Central Bank of Nigeria (CBN) has announced a significant review of the
documentation requirements for transactions conducted through the Pan-African Payment and
Settlement System (PAPSS) in Nigeria.
According to a statement by Hakama Sidi-Ali, CBN’s Acting Director of Corporate Communications Department, the initiative was part of CBN’s ongoing commitment to foster seamless intra-African trade and financial inclusion.
Sidi-Ali said that it would also boost operational efficiency for Nigerians engaging in cross-border payments within Africa.
She said that the initiative was inaugurated by Afreximbank in partnership with the African Union and the African Continental
Free Trade Area (AfCFTA) Secretariat in January 2022.
” PAPSS serves as a centralized payment and settlement platform that enables instant, secure, and efficient cross-border transactions throughout Africa.
“By facilitating payments in local currencies, PAPSS minimizes reliance on third-party currencies, reduces transaction costs, and supports the rapid expansion of trade under the AfCFTA,” she said.
She said that applicants were responsible for ensuring that all regulatory documents were available to facilitate the clearance of goods, as required by relevant government agencies.
“Authorised Dealer Banks may now source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market (without recourse to the CBN).
“All export proceeds repatriated via PAPSS shall be certified by the
relevant processing banks.
“The CBN urges all banks to adopt PAPSS and commence originating
transactions in line with this new policy.
“In addition, CBN encourages exporters, importers, and individuals to familiarise themselves with the new requirements and leverage PAPSS for cross-border transactions within Africa,” she said.
It will be recalled that in a circular issued on April 28, the CBN outlined the key changes to the documentation requirements associated with PAPSS transactions.
The circular effected changes like simplified documentation for Low-Value Transactions.
It said that customers may now use basic KYC and AML documents provided to their Authorised Dealer Banks (ADBs) for low-value
transactions (2,000 dollars and 5,000 dollars) equivalent in Naira for individuals and corporations, respectively).
According to the circular, transactions above the thresholds, and all documentation as stipulated in the CBN Foreign Exchange Manual and related circulars remained mandatory.
(NAN)
