The Central Bank of Nigeria (CBN) has issued a round saying the instant suspension of approvals for the extension of export proceeds repatriation on behalf of exporters.
Dated January 8, 2025, the directive applies to each oil and non-oil export transactions, marking a major coverage shift aimed toward guaranteeing compliance with present rules.
The round was signed by Dr W.J. Kanya, the performing Director of the CBN’s Commerce & Alternate Division and launched on Thursday.
Key provisions of the round
Within the round titled “Suspension of Extension of Export Proceeds on Behalf of Exporters,” the apex bank cited the provisions of Memorandum 10A (23a) and Memorandum 10B (20a) of the International Alternate Handbook (Revised Version, March 2018) as the premise for its resolution. The directive outlines the next key measures:
Speedy suspension of extension requests:
Efficient January 8, 2025, the CBN will not approve requests by licensed vendor banks to increase the timeframe for the repatriation of export proceeds on behalf of their prospects.
This implies exporters should adjust to the stipulated timelines for the repatriation of proceeds with out counting on extensions.
Timelines for repatriation:
For non-oil exports, proceeds should be repatriated and credited to the exporters’ domiciliary accounts inside 180 days from the invoice of lading date.
For oil and gasoline exports, the timeframe is 90 days from the invoice of lading date.
The CBN emphasised that these timelines are non-negotiable, and exporters should strictly adhere to them.
Implications for exporters and banks
The CBN’s resolution locations better duty on exporters and their licensed vendor banks to make sure compliance with the stipulated timelines.
Licensed vendor banks have been directed to inform their prospects of this growth and guarantee adherence to the present rules. Failure to conform may result in penalties or different regulatory actions.
This coverage is anticipated to tighten management over international change inflows, guaranteeing that export proceeds are promptly repatriated to assist Nigeria’s international change reserves.
By eliminating the choice for extensions, the CBN goals to discourage delays in repatriation, which have been a supply of concern for regulators looking for to stabilize the naira and enhance liquidity within the international change market.
What it is best to know
Early final yr, the Central Bank of Nigeria stopped worldwide oil corporations (IOCs) working in Nigeria from instantly remitting 100% of their foreign exchange proceeds to their father or mother firm overseas.
In accordance with a round, IOCs had been allowed to repatriate solely 50% of their proceeds instantly whereas the opposite 50% could be repatriated 90 days from the day of influx.
- The apex bank additionally launched guidelines that will information “money pooling” by IOCs. They included approval from the CBN earlier than the repatriation of funds underneath the money pooling framework, the father or mother entity of IOCs should attain an settlement with the CBN earlier than “money pooling.”
- The bank additional required IOCs to submit assertion of expenditure incurred within the interval previous to the money polling.
- About eight months in the past, the apex bank issued additional clarifications on the utilization of international change proceeds by IOCs.
- The round said that oil corporations are allowed to right away pool the preliminary 50% of their repatriated export proceeds as required.
- Additionally, the round specified that the remaining 50% of the repatriated funds can be utilized by the oil corporations to settle their monetary obligations inside Nigeria, as wanted, throughout a prescribed 90-day interval.
- The CBN additionally introduced that IOCs can promote 50% steadiness of their repatriated export proceeds to licensed foreign exchange sellers.
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