The Central Bank of Nigeria (CBN) has announced the immediate suspension of approvals for extending the repatriation timelines of export proceeds. This policy change, detailed in a circular dated January 8, 2025, applies to both oil and non-oil export transactions. The directive aims to enforce stricter compliance with foreign exchange regulations, stabilizing Nigeria’s currency market and ensuring timely foreign exchange inflows.
Details of the New Policy
The circular, titled “Suspension of Extension of Export Proceeds on Behalf of Exporters,” was signed by Dr. W.J. Kanya, Acting Director of the CBN’s Trade & Exchange Department. It highlights the following key measures:
- Immediate Suspension of Extensions:
Authorized dealer banks can no longer seek extensions for exporters to repatriate export proceeds. - Repatriation Timelines:
- For non-oil exports, proceeds must be repatriated and credited to the exporter’s domiciliary account within 180 days from the bill of lading date.
- For oil and gas exports, the deadline is 90 days from the bill of lading date.
- Strict Compliance:
Exporters and banks must adhere to these non-negotiable timelines to avoid penalties or regulatory actions.
Implications for Exporters and Banks
This policy places a greater burden on exporters and their authorized dealer banks to ensure strict adherence to foreign exchange repatriation timelines. Non-compliance could lead to fines or other regulatory consequences.
The move is designed to address delays in repatriating export proceeds, which have negatively impacted Nigeria’s foreign exchange reserves. By tightening controls, the CBN hopes to boost liquidity in the forex market and support the naira’s stability.
Background on Export Proceeds Management
The new directive follows earlier measures taken by the CBN to regulate the handling of foreign exchange proceeds:
- In 2024, the CBN mandated international oil companies (IOCs) to retain 50% of their forex proceeds within Nigeria for 90 days before transferring the remaining portion.
- Additional rules required IOCs to submit expenditure statements and seek CBN approval for repatriation under the “cash pooling” framework.
- Exporters were previously allowed extensions for repatriation timelines, a practice now discontinued.
Broader Impact
The CBN’s policy shift reflects its commitment to addressing Nigeria’s foreign exchange challenges. It emphasizes timely inflows of export proceeds as a key strategy for maintaining forex reserves, reducing reliance on external borrowing, and stabilizing the naira.
While exporters face stricter requirements, the long-term goal of the policy is to foster a more stable and transparent foreign exchange market. This is part of broader reforms aimed at improving Nigeria’s economic resilience and ensuring sustainable growth.
