CBN Grants Direct FX Access for Pan-African Payment Settlements, Easing Cross-Border Trade

The Central Bank of Nigeria (CBN) has removed foreign exchange restrictions on transactions conducted through the Pan-African Payment and Settlement System (PAPSS). This move is expected to simplify cross-border trade and expand access to foreign currency for Nigerian banks participating in intra-African payments.

PAPSS, launched by Afreximbank in collaboration with the African Union, is a payment infrastructure designed to allow businesses across Africa to settle trade transactions in local currencies, bypassing the need for intermediaries or hard currencies like the U.S. dollar. Nigeria’s deeper integration into the platform marks a significant step toward achieving the goals of the African Continental Free Trade Area (AfCFTA).

Previously, Nigerian banks had to seek approval from the CBN and were subject to strict foreign exchange limits when processing PAPSS transactions—$200,000 per quarter for banks and $20,000 for individuals. Those caps have now been lifted, allowing Authorized Dealer Banks to source FX directly from the Nigerian Foreign Exchange Market (NFEM) without additional clearance from the central bank.

The CBN also announced a simplified documentation process for PAPSS transactions, aimed at speeding up payments and encouraging broader adoption among businesses, particularly small and medium enterprises (SMEs) looking to export within the continent.

Industry analysts have praised the decision as a bold move that could unlock new opportunities for Nigerian businesses and financial institutions by cutting transaction costs and improving liquidity for trade across African borders.

The policy is in line with Nigeria’s ongoing reforms in its FX market, which aims to create a more transparent, market-driven system. It also signals the country’s readiness to play a leading role in Africa’s push toward economic integration and self-sustained regional trade.