The Central Bank of Nigeria (CBN) has announced an immediate suspension of approvals for extensions of export proceeds repatriation for exporters. This policy, outlined in a circular dated January 8, 2025, affects both oil and non-oil export transactions and is aimed at ensuring compliance with the country’s foreign exchange regulations.
Key Provisions
• Timelines for Repatriation:
• Non-oil export proceeds must be repatriated within 180 days from the bill of lading date.
• Oil and gas export proceeds must be repatriated within 90 days.
• Non-Negotiable Rules:
Exporters are required to strictly adhere to these timelines, with no possibility of extensions.
CBN’s Directive
The directive is grounded in the Foreign Exchange Manual (Revised Edition, March 2018) under Memorandum 10A (23a) and Memorandum 10B (20a). It mandates authorised dealer banks to notify their clients of the updated regulations and ensure strict adherence.
Compliance and Penalties
The CBN has warned that non-compliance will attract penalties or regulatory actions. Banks and exporters must fully comply with the updated rules to avoid enforcement measures.
Objectives of the Policy
This measure is part of the CBN’s broader efforts to:
1. Increase foreign exchange inflows.
2. Boost Nigeria’s foreign reserves.
Previous Measures Targeting Export Proceeds
In recent years, the CBN has implemented several regulations for export proceeds:
• For International Oil Companies (IOCs):
• 2024 Rules: IOCs were required to immediately repatriate 50% of forex proceeds, with the remaining 50% repatriated after 90 days.
• Restrictions on cash pooling: Prior CBN approval is required, with detailed expenditure statements submitted for pooled funds.
• IOCs were allowed to sell the repatriated forex to authorised dealers or use it to meet domestic financial obligations.
Implications
The policy imposes stricter obligations on exporters and banks, ensuring timely repatriation of proceeds to strengthen Nigeria’s forex regime. However, it may add pressure on exporters, particularly those dealing with logistical challenges.
