CBN Halts Export Proceeds Repatriation Extensions in Crackdown on Forex Compliance
The Central Bank of Nigeria (CBN) has announced the suspension of approvals for extensions on export proceeds repatriation, a move aimed at tightening compliance with foreign exchange regulations.
The directive, outlined in a circular dated January 8, 2025, applies to all oil and non-oil export transactions. Signed by Dr W.J. Kanya, Acting Director of the CBN’s Trade & Exchange Department, the document cites provisions in the Foreign Exchange Manual (Revised Edition, March 2018) as its legal foundation, specifically Memorandum 10A (23a) and Memorandum 10B (20a).
A Non-Negotiable Stance
Effective immediately, exporters are required to strictly adhere to repatriation timelines:
Non-oil export proceeds must be repatriated within 180 days of the bill of lading date.
Oil and gas export proceeds must be repatriated within 90 days of the bill of lading date.
The CBN circular stated unequivocally:
“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 authorised 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 the stipulated timelines.”
Stricter Oversight
Banks have been directed to notify their clients and ensure compliance with these updated rules. The CBN also warned that failure to comply could result in penalties or other regulatory actions, underscoring the seriousness of its enforcement efforts.
The policy is part of broader measures to boost foreign exchange inflows and strengthen Nigeria’s foreign reserves.
A History of Tightened Controls
This latest move follows a series of restrictions imposed last year, particularly on international oil companies (IOCs) operating in Nigeria. The CBN had limited IOCs’ ability to immediately remit 100 per cent of their forex proceeds to parent companies abroad. Instead, companies were required to repatriate:
50 per cent of forex proceeds immediately,
The remaining 50 per cent within 90 days of inflow.
Additionally, the apex bank introduced stringent cash pooling rules, mandating prior approval for repatriation under the cash pooling framework. IOCs were required to submit detailed expenditure statements before pooling funds.
Last year’s measures also allowed IOCs to sell the 50 per cent balance of their repatriated proceeds to authorised foreign exchange dealers while using the other 50 per cent to settle financial obligations within Nigeria over 90 days.
A Strategic Move Amid Economic Pressures
The CBN’s decision reflects its commitment to ensuring that Nigeria maximises its foreign exchange earnings in a challenging economic environment. By enforcing these timelines and limiting exemptions, the apex bank seeks to stabilise the naira and address the persistent shortage of foreign exchange in the country.
As exporters and financial institutions brace for stricter oversight, this policy marks another step in the CBN’s bid to realign Nigeria’s trade and financial practices with its broader economic goals.
