The Payment and Settlement System (PAPSS), an international payment system and cross-border financial market infrastructure enabling remittance payment and trade between African countries, is running.

The PAPSS centralised Financial Market Infrastructure, which supports payment by African countries, was deployed in the West African Monetary Zone (WAMZ) in Nigeria, the Gambia, Sierra Leone, Liberia, Ghana and Guinea. However, central banks within the regions are taking a critical look at the networks by instituting capital controls on how funds move within the network.

The Central Bank of Nigeria (CBN) last week limited the volume of transactions for dealer banks and customers to $200,000 and $20,000.

A circular signed by CBN Director of Trade and Exchange Department, Ozoemena Nnaji, said the transactions would be settled using the CBN foreign exchange, adding that PAPSS’ transactions remain trade backed.

According to the CBN, multiple applications through various Authorised Dealer Banks were not allowed. For settlement of PAPSS transactions by CBN, authorised dealers shall obtain the approval of CBN for USD cover, before initiating payments on PAPSS. The request for approval shall be submitted online.