The Central Bank of Nigeria (CBN), has directed banks to apply the indicative exchange rates in the Investors and Exporters (I&E) window for   outbound payments through the  Pan African Payments and Settlement System (PAPSS).

PAPSS is the   first centralized payment market infrastructure for processing, clearing and settling of intra-African trade and commerce payments.

It was  set up  by the Afreximbank in partnership with the West African Monetary institute (WAMI). The bank stated this in a circular introducing the Guidelines on Operations of PAPSS in Nigeria, issued yesterday, signed by the Director, Trade and Exchange Department, CBN, Dr. Ozoemena Nnnaji.

The apex bank  stated:  “All authorised dealers are required to ensure that prevailing exchange rate at Investors and Exporters Forex Window as advised by Financial Markets Department, FMD, should be used in cross-rates conversion between Naira, United States Dollars and third currencies within Africa, for outbound payments and vice-versa for inflows; “For settlement of PAPSS transactions by CBN, Authorised Dealers shall obtain the approval of CBN for dollar cover, before initiating payments on PAPSS. The request for approval should be forwarded to The Director, Financial Markets Department, CBN;   

“ That eligible payment of imports and receipt of export proceeds by the CBN shall be restricted to trade-backed transactions only and that the documentation requirements stipulated in Memorandum 9 and 10 of the Foreign Exchange Manual (2018) and other extant circulars shall apply. Import payments shall also be restricted to goods of African origin. “That all the required documentations referred to in (1) above should be provided before a transaction is initiated on PAPSS by authorised dealers and their customers;