From Adanna Bnamani, Abuja
The Central Bank of Nigeria (CBN) has announced the immediate suspension of approvals for the extension of export proceeds repatriation for exporters.
This directive, communicated through a circular dated January 8, 2025, pertains to both oil and non-oil export transactions, reinforcing the bank’s commitment to ensuring compliance with existing foreign exchange regulations.
The circular, signed by W.J. Kanya, acting Director of the CBN’s Trade & Exchange Department, cites specific provisions in the Foreign Exchange Manual (Revised Edition, March 2018) as the foundation for this decision. Key references include Memorandum 10A (23a) and Memorandum 10B (20a), which outline the repatriation requirements.
Effective immediately, the CBN will no longer grant extensions for the repatriation of export proceeds requested by authorised dealer banks on behalf of their clients.
Exporters must now strictly adhere to established timelines for repatriation. Specifically, proceeds from non-oil exports should be repatriated within 180 days from the bill of lading date, while oil and gas export proceeds are expected to be repatriated within 90 days. The apex bank empathised that these timelines are non-negotiable.
The circular states, “With effect from the date of this circular, the Central Bank of Nigeria will no longer approve requests for extension of repatriation of export proceeds by Authorized Dealers on behalf of their customers. For the avoidance of doubt, proceeds of oil and non-oil exports are to be repatriated and credited into the exporters’ export proceeds domiciliary accounts within 180 days and 90 days from the bill of lading date for Non-Oil and Oil & Gas exports, respectively.
This development imposes stricter obligations on exporters and their authorized dealer banks, necessitating compliance with the newly enforced repatriation rules. Banks are expected to promptly inform their clients of the updated regulations and monitor adherence. The CBN warned that non-compliance could lead to penalties or other regulatory actions.
This policy is part of a broader strategy aimed at enhancing foreign exchange inflows and strengthening the country’s reserves
In the previous year, the CBN introduced measures affecting international oil companies (IOCs) operating in Nigeria, which restricted their ability to remit 100 percent of forex proceeds to their parent companies immediately. Instead, IOCs were required to repatriate 50 percent of their proceeds right away, with the remaining half to be repatriated within 90 days of the inflow.
The apex bank also implemented new rules governing cash pooling by IOCs, requiring prior approval for repatriation under the cash pooling framework, alongside detailed statements of expenditures incurred before pooling
Furthermore, the CBN clarified that IOCs could pool 50 percent of their export proceeds while utilizing the remaining funds to settle financial obligations within Nigeria over a period of 90 days. IOCs were also permitted to sell the 50 percent balance of their repatriated proceeds to authorised foreign exchange dealers.