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.
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