CBN Suspends Extension of Export Proceeds Repatriation

 

The Central Bank of Nigeria (CBN) has halted approvals for extending the repatriation of export proceeds for exporters. This directive, issued in a circular dated January 8, 2025, applies to both oil and non-oil export transactions.

The apex bank stated that the decision aligns with provisions outlined in the Foreign Exchange Manual (Revised Edition, March 2018), specifically Memorandum 10A (23a) and Memorandum 10B (20a). 

The move is intended to ensure strict compliance with Nigeria’s foreign exchange regulations and to enhance foreign exchange inflows.

Updated Regulations

1. Mandatory 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.
     These timelines are non-negotiable.

2. No Extensions Granted:
   Requests for extensions made by authorized dealer banks on behalf of exporters will no longer be considered.

The circular, signed by Dr. W.J. Kanya, acting Director of the Trade & Exchange Department, emphasized, “Export proceeds must be repatriated and credited to exporters’ domiciliary accounts within the stipulated timelines.”

Compliance and Penalties

The CBN has directed authorized dealer banks to notify their clients of these new regulations and ensure compliance. The apex bank also warned that non-compliance could result in severe penalties or regulatory sanctions.

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Broader Policy Objectives

The suspension of repatriation extensions is part of the CBN’s broader strategy to strengthen Nigeria’s foreign reserves and regulate foreign exchange inflows effectively.

In 2024, the CBN introduced measures targeting International Oil Companies (IOCs), requiring them to:

• Repatriate 50% of their forex proceeds immediately, with the remaining 50% to be repatriated after 90 days.
• Seek prior approval for cash pooling arrangements, along with providing detailed expenditure statements.

These regulations were designed to ensure that a portion of export proceeds remains within the country to meet local financial obligations.

FAQs

• Why did the CBN suspend extensions for export proceeds repatriation?

The CBN implemented this policy to enforce compliance with foreign exchange regulations, enhance transparency, and improve foreign exchange inflows into Nigeria’s reserves.

• What are the timelines for repatriating export proceeds?

Non-oil exports: 180 days from the bill of lading date.
Oil and gas exports: 90 days from the bill of lading date.

• What happens if exporters fail to meet the repatriation timelines?

Non-compliance may result in penalties or other regulatory actions imposed by the CBN on exporters or their authorised dealer banks.

• Are there any exceptions to the new regulations?

No, the CBN has explicitly stated that these timelines are non-negotiable and that no extensions will be granted.

• How will this policy impact exporters and authorised dealer banks?

Exporters must ensure timely compliance with the repatriation rules, while authorised dealer banks are responsible for notifying their clients and ensuring adherence to the updated regulations.

The CBN’s tighter regulations reflect its commitment to fostering financial discipline and boosting the country’s economic stability through robust foreign exchange management.