CBN Suspends Authorization for Extension of Export Proceeds Repatriation

In an effort to enhance the regulation of foreign exchange, the Central Bank of Nigeria (CBN) has declared that it will cease to approve requests from authorized dealers for the extension of repatriation of export proceeds on behalf of their clients.

This decision, which takes effect immediately, was communicated through a circular signed by W.J. Kanya, the acting director of the Trade and Exchange Department.

The circular, directed to all authorized dealers and the public, underscores the importance of strict compliance with the guidelines set forth in the foreign exchange manual (Revised Edition, March 2018).

In particular, the notice emphasizes that the proceeds from both oil and non-oil exports must be repatriated and deposited into the exporters’ export proceeds domiciliary accounts within 180 days for oil and gas exports and 90 days for non-oil exports, commencing from the date of the bill of lading.

“This is a clear directive that aims to ensure prompt and efficient repatriation of export proceeds, which is vital for the stability of our foreign exchange market,” said an analyst. “It is critical for both oil and non-oil exporters to comply with this regulation to avoid any disruptions in their dealings with authorised dealers.”

Authorized dealer banks are now mandated to inform their clients about this new directive and ensure adherence. This initiative aims to improve the liquidity of the foreign exchange market by minimizing delays in the repatriation of export proceeds, which has recently been a major concern for the Central Bank of Nigeria (CBN).

The CBN's initiative reflects its ongoing commitment to fortifying the nation's foreign exchange policy framework and ensuring prompt compliance with regulations that foster economic stability.

With the implementation of this new measure, exporters will need to modify their operations accordingly, with banks playing a crucial role in ensuring compliance with the stipulated 180-day and 90-day timelines. The central bank has emphasized the necessity of following these deadlines, warning that non-compliance may result in consequences for both exporters and the banks managing their transactions.

The halt on extension requests is viewed as part of a comprehensive strategy to tackle Nigeria's persistent issues related to foreign currency management and economic stability.