CBN grants direct FX access to Pan-African payment settlement system
CBN grants direct FX access to Pan-African payment settlement system
The Central Bank of Nigeria (CBN) has announced changes to the foreign exchange and documentation requirements for transactions conducted through the Pan-African Payment and Settlement System (PAPSS). The updates aim to streamline cross-border transactions within Africa. Key changes include:
- Foreign Exchange Sourcing: Authorized Dealer Banks (ADBs) can now source foreign exchange for PAPSS settlements directly from the Nigerian Foreign Exchange Market, eliminating the need to rely on the CBN.
- Documentation for Export Proceeds: Export proceeds repatriated via PAPSS must be certified by the relevant processing banks to ensure regulatory compliance.
- Simplified Process for Low-Value Transactions: For transactions up to $2,000 (individuals) or $5,000 (corporates), basic Know-Your-Customer (KYC) and Anti-Money Laundering (AML) documents are required. Transactions above these thresholds will need full documentation.
- Clearance of Goods: Applicants must ensure all necessary regulatory documents for clearing goods are readily available to speed up trade processing.
These changes, effective immediately, aim to enhance liquidity, reduce transaction costs, and support Africa's economic integration through easier intra-African trade. The CBN encourages Nigerian banks to adopt PAPSS fully to facilitate smoother cross-border transactions.
