Central Bank of Nigeria (CBN), yesterday, announced a major review of documentation requirements for transactions conducted through the Pan-African Payment and Settlement System (PAPSS) in the country.
The move was part of CBN's ongoing commitment to foster seamless intra-African trade, financial inclusion, and operational efficiency for Nigerians engaging in cross-border payments within Africa.
The amendments were conveyed in a statement issued by the apex bank's acting Director, Corporate Communications Department, Mrs. Hakama, Sidi Ali.
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PAPSS was launched on January 13, 2022 by African Union (AU) and African Export-Import Bank (Afreximbank) to complement trading under the African Continental Free Trade Area (AfCFTA) with further future planned rollout in the Caribbean region.
It is a Pan-African real-time gross settlement (RTGS) infrastructure for cross-border payments in distinct local currencies, and serves as a centralised payment and settlement platform that enables instant, secure, and efficient cross-border transactions throughout Africa.
To ease cross-border transactions, the central bank stated that it was effective immediately, and to simplified documentation for low-value transactions, customers might now use basic Know-Your-customer (KYC) and Anti-Moneylaundering (AML) documents provided to their Authorised Dealer Banks (ADBs) for low-value transactions of $2,000 and $5,000 equivalent in Naira for individuals and corporate, respectively.
CBN pointed out that for transactions above the thresholds, all documentation as stipulated in the CBN Foreign Exchange Manual and related circulars remained mandatory.
The central bank further stressed that applicants were responsible for ensuring all regulatory documents were available to facilitate the clearance of goods, as required by relevant government agencies.
According to the apex bank, by facilitating payments in local currencies, PAPSS minimises reliance on third-party currencies, reduces transaction costs, and supports the rapid expansion of trade under the AfCFTA.
Likewise, as part of the revised policy, CBN stated that ADBs might now source foreign exchange for PAPSS settlements through the Nigerian Foreign Exchange Market, without recourse to the apex bank.
Furthermore, all export proceeds repatriated via PAPSS shall be certified by the relevant processing banks, it added.
CBN urged all banks to adopt PAPSS and commence originating transactions in line with the new policy.
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It encouraged exporters, importers, and individuals to familiarise themselves with the new requirements and leverage PAPSS for cross-border transactions within Africa.
