In a significant policy shift, the Central Bank of Nigeria (CBN) has announced the suspension of the extension of export proceeds repatriation on behalf of exporters. This decision, communicated through a circular referenced TED/FEM/FPC/GEN/001/001 and dated January 8, 2025, came into effect on the same date. The policy is expected to have a profound impact on exporters and financial institutions handling export proceeds in Nigeria.
Key Highlights of the Policy
1. Suspension of Extension Approvals: Effective January 8, 2025, the CBN no longer approves requests for the extension of repatriation deadlines for export proceeds. This applies to both oil and non-oil export proceeds and means that Authorized Dealers (banks) can no longer act on behalf of exporters to request deadline extensions.
2. Alignment with Foreign Exchange Manual: This policy aligns with the provisions of Memorandum 10A (23) and Memorandum 10B (20a) of the Foreign Exchange Manual (March 2018 Revised Edition). It mandates the strict adherence to timelines for repatriating export proceeds to ensure compliance with Nigeria’s foreign exchange regulations.
3. Repatriation Timelines: The new guidelines require that proceeds of:
• Non-Oil Exports be repatriated and credited to the exporter’s domiciliary account within 180 days from the Bill of Lading date.
• Oil and Gas Exports be repatriated and credited within 90 days from the Bill of Lading date.
Implications for Exporters
This suspension calls attention to the CBN’s intent to tighten compliance with foreign exchange regulations and enhance the repatriation of export proceeds into the Nigerian economy. Exporters and Authorized Dealers must now adhere strictly to the stipulated timelines without the possibility of extensions.
Failure to comply may expose exporters to regulatory sanctions, including potential blacklisting, restrictions on access to foreign exchange markets, and reputational damage.
What Exporters Should Do
1. Strict Adherence to Timelines: Exporters must prioritize timely documentation and processes to ensure compliance with the 180-day and 90-day deadlines for non-oil and oil exports, respectively.
2. Engage with Financial Institutions: Proactively engage with Authorized Dealers (banks) to ensure smooth repatriation processes. Exporters should ensure that all documentation, such as Bills of Lading and export invoices, are accurate and promptly submitted.
3. Review Contracts: Exporters should review existing contracts with international buyers to account for these regulatory timelines. This ensures that contractual terms align with Nigeria’s foreign exchange regulations.
Strategic Impact on Nigeria’s Economy
This policy is expected to:
• Strengthen Nigeria’s foreign exchange reserves by ensuring faster inflows from export proceeds.
• Promote accountability and transparency in the repatriation of export earnings.
• Encourage exporters to comply with foreign exchange rules, thereby supporting the stability of the Naira.
