Nigeria has reinforced its position at the forefront of African trade integration, with 22 commercial banks now fully onboarded onto the Pan-African Payment and Settlement System (PAPSS) — the highest of any country on the continent.

The move follows a formal directive from the Central Bank of Nigeria (CBN), mandating all banks operating in the country to begin originating cross-border transactions through PAPSS, a unified platform designed to simplify and de-dollarize intra-African trade.

The CBN’s directive, which became effective through a circular issued on April 28, 2025, marks a significant departure from traditional cross-border payment systems that rely heavily on third-party currencies like the U.S. dollar. With the new policy, Nigeria’s financial system is now structurally positioned to better align with the goals of the African Continental Free Trade Area (AfCFTA) — the African Union-led initiative to boost intra-African trade by eliminating tariffs and creating a single market for goods and services across 54 countries.

According to the circular, referenced TED/FEM/PUB/FPC/001/006, the apex bank emphasized the importance of PAPSS in “deepening intra-African trade, enhancing payment efficiency, and reducing reliance on non-African currencies.” The CBN called on all banks to adopt the framework immediately, streamlining their infrastructure to accommodate PAPSS as a payment channel.

What is PAPSS?

Launched in January 2022 by the African Export-Import Bank (Afreximbank), in collaboration with the African Union and the AfCFTA Secretariat, PAPSS is a centralized payment system that enables instant, secure, and direct settlement of cross-border transactions in local African currencies. The system is aimed at minimizing foreign exchange conversion costs, speeding up payments, and reducing the friction that currently hampers African trade.

Unlike conventional cross-border transactions that pass through multiple intermediaries and foreign correspondent banks, PAPSS allows buyers and sellers in different African countries to pay and receive money in their respective local currencies. This not only removes exchange rate complexities but also enhances monetary sovereignty across the continent.

As of May 2025, over 150 banks across 16 African countries are connected to PAPSS, making Nigeria’s contribution both symbolic and operationally significant.

List of Nigerian Banks Now on PAPSS

The 22 Nigerian banks now integrated with PAPSS include both commercial and merchant banking institutions:

1. First Bank
2. United Bank for Africa (UBA)
3. Access Bank
4. Stanbic IBTC
5. Sterling Bank
6. Wema Bank
7. Keystone Bank
8. Lotus Bank
9. Providus Bank
10. Polaris Bank
11. Union Bank
12. Jaiz Bank
13. Zenith Bank
14. Fidelity Bank
15. Optimus Bank
16. Coronation Merchant Bank
17. Parallex Bank
18. Taj Bank
19. FSDH Merchant Bank
20. Ecobank
21. FBNQuest Merchant Bank
22. Unity Bank

This extensive participation reflects a major banking sector endorsement of the AfCFTA agenda. It also signals Nigeria’s readiness to tap into the broader African market, where demand for faster, cheaper, and transparent payment channels continues to grow.

Lower Barriers for Small Traders and SMEs

One of the most transformative aspects of the CBN’s April directive is the simplification of documentation for low-value cross-border transactions. Under the new framework, individuals transacting up to $2,000 (or its naira equivalent) and corporate entities transacting up to $5,000 are now permitted to conduct such operations using only the Know Your Customer (KYC) and Anti-Money Laundering (AML) documentation already submitted to their authorized dealer banks.

Transactions above those thresholds, however, will still require compliance with the standard documentation procedures outlined in the CBN’s Foreign Exchange Manual and related circulars. According to the CBN’s Acting Director of Corporate Communication, Mrs. Hakama Sidi Ali, this dual-tier approach is designed to widen access to intra-African trade channels without compromising financial integrity or regulatory oversight.

Analysts have long argued that initiatives like PAPSS could help African countries, particularly Nigeria, reduce dependency on foreign currencies in cross-border transactions — a dependency that has long contributed to volatility in the local forex market. With the naira now usable in direct trade settlements through PAPSS, the policy is expected to relieve some of the pressure on Nigeria’s foreign reserves and reduce the demand for hard currency in regional transactions.

Strategic Alignment With AfCFTA Goals

For Nigeria, PAPSS is not just a payment innovation — it’s a strategic move to unlock the benefits of the AfCFTA. By joining the platform and mandating adoption across its banking system, Nigeria is now better placed to take advantage of the $3.4 trillion economic bloc envisioned under AfCFTA.

The move is also timely, coming as Nigerian authorities attempt to diversify the economy and boost non-oil exports. With PAPSS, Nigerian producers and traders — particularly those dealing in textiles, agro-allied products, and manufactured goods — can now seamlessly tap into markets across Africa with minimal cost.

According to a joint report by the AfCFTA Secretariat and Afreximbank, intra-African trade is expected to grow by over 50% by 2030 if payment, logistics, and tariff barriers are removed. PAPSS is seen as the cornerstone to achieving that vision.

Thus, the widespread onboarding of Nigerian banks and the full adoption of PAPSS signals a new phase in Africa’s economic integration — one where Nigeria is not only participating but taking the lead.

However, stakeholders note that payment systems are just one part of the puzzle. To fully benefit from AfCFTA, Nigeria must also address non-tariff barriers, modernize its transport and logistics infrastructure, and streamline customs procedures.