Ethiopia joins PAPSS as Nigeria deepens push for local-currency African trade
Nigeria’s push to expand local-currency payments for intra-African trade has received fresh momentum as Ethiopia joins the Pan-African Payment and Settlement System (PAPSS), creating another potential payment corridor for Nigerian businesses trading across the continent.
The development, announced Thursday in Addis Ababa, brings Ethiopia into the expanding PAPSS network, which enables participating African financial institutions to process cross-border transactions in local currencies.
For Nigeria, the move comes as the country seeks to increase the use of PAPSS among banks, businesses and traders as an alternative to traditional cross-border payment channels that often depend on the US dollar and foreign correspondent banks.
The Central Bank of Nigeria (CBN) is a participant, regulator and settlement member for Nigeria on PAPSS and has funded its PAPSS settlement account with Afreximbank. The CBN says it has successfully settled transactions daily on behalf of Nigerian participants.
Nigeria has also moved to reduce documentation barriers around PAPSS transactions. Under revised requirements announced by the CBN, simplified KYC and anti-money-laundering documentation applies to eligible transactions below specified monthly thresholds, while commercial banks can source foreign exchange for PAPSS transactions through Nigeria’s FX market.
The development could become increasingly important for Nigerian exporters, importers and small businesses seeking easier access to African markets.
Recent data indicate that PAPSS activity in Nigeria has expanded rapidly. Transaction volumes in the country rose about 1,100 per cent year-on-year in 2026, while transaction values increased about 125 per cent, according to figures released by PAPSS.
Nigeria has also become a testing ground for new forms of African cross-border payments. In February, Onafriq and PAPSS launched a pilot for wallet-based outbound payments from Nigeria to Ghana, allowing users to send funds in naira while beneficiaries receive local currency.
The Bank of Ghana disclosed this week that PAPSS has also been extended to mobile wallets on the Ghana-Nigeria corridor as part of wider testing of interoperability involving bank accounts, mobile wallets, stablecoins and central bank digital currencies.
Against this backdrop, Ethiopia’s entry into PAPSS could give Nigerian businesses another avenue for settling trade transactions with one of Africa’s largest economies without relying exclusively on conventional foreign-currency payment channels.
Announcing Ethiopia’s participation, National Bank of Ethiopia Governor Dr. Eyob Tekalign said the move would help modernise the country’s financial system and deepen its economic links with the rest of Africa.
“Ethiopia’s integration into the PAPSS network represents an important step in our continued efforts to modernise our financial system and deepen our economic connections with the rest of Africa,” he said.
PAPSS Chief Executive Officer Mike Ogbalu III said Ethiopia’s entry would connect its financial institutions to the growing continental payments infrastructure and create new opportunities for cross-border payments.
The development also comes ahead of PAPSS COWRY 2026, Africa’s Payments Conference, scheduled for November 26–27 in Addis Ababa.
The conference will focus on cross-border payments, local-currency settlement, interoperability, financial infrastructure, artificial intelligence, stablecoins, digital assets and cybersecurity.
For Nigeria, the expansion of PAPSS comes as policymakers and financial institutions seek to make intra-African trade faster, cheaper and less dependent on external financial infrastructure.
With Nigeria already recording rapid growth in PAPSS usage, the addition of Ethiopia and other markets could further widen the payment corridors available to Nigerian businesses under the African Continental Free Trade Area.
