The Central Bank of Nigeria (CBN) has explained that its recent decision to suspend the extension of export proceeds by authorized dealer banks on behalf of exporters is aimed at enforcing compliance with existing regulations on foreign exchange repatriation. According to the CBN, this action is guided by the provisions of Memorandum 10A (23a) and Memorandum 10B (20a) of the Foreign Exchange Manual, Revised Edition of March 2018, which clearly stipulate timelines for the repatriation of export proceeds for both oil and non-oil exports. The measure is designed to enhance transparency, strengthen the nation’s foreign exchange system, and ensure that export earnings are returned to the country within the required timeframe to support economic stability.
In a circular issued to authorized dealers and the public, Acting Director of the Trade and Exchange Department, Dr. W.J. Kanya, outlined the specific terms of the directive. He stated that, effective immediately, the CBN would no longer approve any requests for extensions of the repatriation period for export proceeds submitted by authorized dealer banks on behalf of their customers. This move underscores the apex bank’s resolve to tighten its regulatory framework and prevent undue delays in bringing export earnings into Nigeria’s financial system.
The circular highlighted the mandatory timelines exporters must adhere to when repatriating proceeds. For non-oil exports, funds must be repatriated and credited into the exporter’s domiciliary account within 180 days from the date of the Bill of Lading. For oil and gas exports, the repatriation window is set at 90 days. These timelines are intended to enhance liquidity in the foreign exchange market by ensuring that export-generated foreign currency is promptly available to support trade and other economic activities.
The CBN emphasized that authorized dealer banks must inform their customers of the suspension and ensure strict compliance with the stipulated guidelines. Failure to adhere to the repatriation requirements could result in regulatory sanctions, as the bank seeks to enforce discipline in the handling of foreign exchange transactions. By eliminating the practice of granting extensions, the CBN aims to curb potential abuses and speculative practices that may arise when export proceeds remain outside the country for extended periods.
This policy shift comes as part of broader efforts by the CBN to stabilize the Nigerian economy through effective foreign exchange management. Repatriation of export proceeds plays a crucial role in boosting the country’s foreign reserves, which are vital for maintaining currency stability and facilitating international trade. The decision to suspend extensions reflects the bank’s commitment to ensuring that foreign exchange inflows from exports are efficiently utilized to strengthen economic resilience and reduce reliance on external borrowing.
The apex bank’s directive is also expected to increase accountability among exporters and financial institutions, fostering a more transparent and predictable trading environment. By adhering to the established guidelines, exporters contribute to a healthier balance of payments position, which is critical for economic growth and investor confidence. The CBN’s proactive enforcement of these rules signals its readiness to implement policies that promote financial discipline, safeguard national interests, and enhance the overall efficiency of Nigeria’s foreign exchange market.
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