The Central Bank of Nigeria (CBN) has announced the immediate suspension of extensions for export earnings repatriation requests, according to a circular issued on Thursday.
This new policy, effective January 8, 2025, applies to both oil and non-oil export operations and represents a significant shift in the country’s trade and foreign exchange regulations.
Dr. W.J. Kanya, the interim director of the CBN’s Trade & Exchange Department, signed the circular, which was made public on Thursday.
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The top bank based its conclusion in the circular entitled “Suspension of Extension of Export Proceeds on Behalf of Exporters” on the Foreign Exchange Manual (Revised Edition, March 2018). Memorandum 10A (23a) and Memorandum 10B (20a) are two examples of these clauses.
The CBN will no longer grant requests from authorised dealer banks to prolong the period for export revenues to be repatriated on behalf of their clients as of January 8, 2025.
Non-oil export proceeds repatriation must be done within 180 days
This implies that exporters cannot count on extensions and must adhere to the deadlines for repatriating revenues. Within 180 days of the bill of lading date, exporters must repatriate the proceeds and credit them to their domestic accounts for non-oil exports. The period is ninety days from the bill of lading date for exports of gas and oil.
The CBN stressed that exporters must rigorously follow these non-negotiable deadlines.
Exporters and their approved dealer banks now have more stringent duties to adhere to the repatriation regulations as a result of this development.
Banks are supposed to inform their customers about the new rules and make sure they are followed. The CBN issued a warning that failure to comply may result in fines or other regulatory measures.
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The policy aims to increase foreign exchange
The strategy is a component of the CBN’s endeavours to strengthen the nation’s reserves and increase foreign exchange inflows.
The CBN implemented regulations last year that restricted foreign oil companies doing business in Nigeria from sending all of their foreign exchange earnings back to their parent corporations. As an alternative, IOCs had to repatriate half of their profits right away, with the other half to be repatriated ninety days following the inflow.
Additionally, the CBN established new guidelines for IOC cash pooling. According to these regulations, repatriation under the cash pooling framework requires prior CBN permission in addition to thorough reports of all expenses incurred before pooling.
Additionally, the apex bank clarified these procedures last year, permitting IOCs to pool 50 percent of their export earnings and use the remaining cash to pay off debts within Nigeria over 90 days.
Additionally, IOCs were allowed to sell approved foreign currency dealers the remaining 50 percent of their repatriated revenues.