Nigeria has launched its first wallet-based outbound cross-border payment corridor, allowing for instant Naira-to-Ghanaian Cedi transfers without the traditional reliance on the U.S. dollar. The pilot program, approved by the Central Bank of Nigeria (CBN), is being executed by Onafriq Nigeria Payments Ltd in collaboration with the Pan-African Payment and Settlement System (PAPSS). This move represents a significant shift in West African financial architecture, aiming to lower transaction costs and reduce the settlement delays that have long hampered small and medium-sized enterprises (SMEs) across the sub-region.
The six-month pilot, which commenced in December 2024, enables individuals and merchants to send funds directly to recipients in Ghana, bypassing the need for currency conversion into hard currencies. For the Nigerian economy, this initiative arrives at a critical juncture as the country continues to grapple with foreign exchange volatility and a persistent scarcity of liquidity. By facilitating trade in local currencies, the framework potentially reduces the demand pressure on the dollar for intra-African transactions a structural shift that could offer some respite to the Naira’s long-term stability.
From an analytical perspective, the economic implications for Nigeria are profound, particularly regarding the formalization of informal trade. SMEs dominate the Nigeria-Ghana trade route, dealing largely in textiles, consumer goods, and agriculture. Historically, these traders have relied on cash or unregulated intermediaries to move value across borders, exposing them to high fees, theft, and erratic exchange rates. The introduction of an instant, wallet-to-wallet system integrates these traders into the formal financial ecosystem, enhancing the accuracy of trade data and potentially expanding the tax base through improved visibility of cross-border commerce.
Furthermore, the partnership between Onafriq and PAPSS a platform backed by the African Export-Import Bank (Afreximbank) links bank-led and mobile-led payment markets that have traditionally operated in silos. With over 1.5 billion wallets and accounts now potentially reachable through this network, the scalability of this project could serve as a blueprint for the wider African Continental Free Trade Area (AfCFTA). For Nigerian fintechs, this pilot opens new revenue streams, allowing them to leverage their technological infrastructure to serve a broader continental market.
However, the success of this initiative will depend on sustained liquidity and the willingness of commercial banks to fully integrate with the PAPSS infrastructure. While the pilot targets the bi-directional flow between West Africa’s two largest mobile money markets, the broader goal is to eliminate the “roadblock” perception of African borders. By making cross-border payments as simple as domestic transactions, the Nigerian government and its regional partners are addressing a major structural barrier to GDP growth.
The long-term outlook for this Naira-first approach hinges on the results of the initial six-month trial. If successful, the expansion of local-currency settlement systems will likely reduce the continent’s dependence on offshore correspondent banks, which currently route the majority of intra-African payments. This strategic decoupling from the dollar for regional trade is a vital step toward strengthening Nigeria’s economic sovereignty and fostering a more resilient West African trade bloc.
