CBN removes limits on PAPSS for trade payment services

The Central Bank of Nigeria (CBN) has removed the limits and restrictions on transactions on the Pan-African Payment and Settlement System (PAPSS).

This is contained in a circular dated March 12, signed by Hassan Mahmud, CBN’s director of trade and exchange department.

PAPSS is a cross-border financial market infrastructure enabling payment transactions across Africa, bridging trade challenges in a continent with over 41 known currencies. 

In June 2023, PAPSS signed a memorandum of understanding (MOU) with five African multinational commercial banking groups such as UBA and Access Bank for seamless cross-border trade payments.

One month later, the apex bank pegged the amount for transactions in PAPSS at $200,000 per quarter by authorised dealer bank (ADB) and $20,000 per quarter for a customer.

However, in the latest circular, the CBN said all limits and restrictions on PAPSS, including the amount to be paid quarterly, have been removed.

“Following the recent liberalization of the Nigerian Foreign Exchange Market and the Central Bank of Nigeria (CBN) initiatives to boost foreign exchange inflows, particularly through the facilitation of intra-Africa continental trade, we hereby revise our Circular Ref-TED/FEM/PUB/FPC/01/005 issued on July 25, 2023, on the above subject,” the circular reads.

“Removal of all restrictions and limits on Pan African Payment and Settlement System (PAPSS), including US$20,000 and US$200,000 quarterly limits per Individual and authorised dealer banks (ADBs), respectively.

“Removal of the restrictions of ‘only’ Trade backed and inwards transactions

“ADBs are allowed to source for FX for settlement of PAPSS transactions through the Nigerian Foreign Exchange Market with no recourse to the CBN.

“All export proceeds repatriated under PAPSS shall be subject to certification by the respective processing banks.”

The apex bank also said all documentation requirements stipulated in the foreign exchange manual and extant circulars will continue to apply.