At the centre of the revised framework is a N100 million penalty for authorised dealers that process foreign exchange transactions without adequate supporting documentation, a move aimed at improving transparency and strengthening oversight within Nigeria’s FX ecosystem.
The new provisions are contained in the fourth edition of the Foreign Exchange Manual, released by the CBN's Trade and Exchange Department in May 2026. The updated manual represents the most comprehensive review of Nigeria's foreign exchange regulations since 2017 and serves as a guide for banks, authorised dealers, exporters, investors, businesses, and members of the public involved in forex transactions.
Under the offences and sanctions section of the manual, the apex bank stated: “Authorised dealers shall pay N100m in addition to N10m per transaction” for consummating foreign exchange transactions with inadequate documentation.
The sanction forms part of a broader effort by the CBN to address long-standing concerns about compliance failures, improve market discipline, and curb practices that undermine the integrity of the foreign exchange market.
Stricter Oversight and Compliance Measures
According to the CBN, the revised manual is designed to promote greater transparency in foreign exchange inflows and outflows, establish clearer documentation and reporting standards, strengthen enforcement mechanisms, and ensure that foreign exchange resources are directed towards productive sectors of the economy.
Beyond the N100 million penalty, the regulator introduced a range of sanctions targeting violations by authorised dealers and market participants.
Banks that exceed approved Net Open Position limits will now face escalating disciplinary measures. A first violation will attract a warning letter, while a second offence will result in a 10-working-day suspension from participation in the foreign exchange market. A third breach will lead to a 90-day suspension.
The CBN also reinforced reporting obligations for authorised dealers, requiring daily returns on foreign exchange transactions to be submitted by 10 a.m. for the previous business day, while monthly returns must be rendered within five working days after the end of each month.
Failure to meet these obligations will attract financial penalties. Late submission of returns now carries a fine of N500,000, while non-submission attracts a minimum penalty of N5 million, with an additional N500,000 imposed for every day the violation remains unresolved.
Tough Sanctions for Unauthorised Forex Reallocations
The apex bank further warned financial institutions against reallocating foreign exchange funds without obtaining the necessary regulatory approvals.
According to the manual, such infractions could attract monetary sanctions, suspension of authorised dealership licences for a minimum period of six months, or complete revocation of licences in severe cases.
The move reflects the regulator's determination to ensure that foreign exchange allocations are utilised strictly for approved purposes and in line with existing regulations.
Importers Face Market Restrictions for Non-Compliance
Import-related transactions received significant attention in the revised framework.
Under the new rules, importers are required to submit Exchange Control Documents within 90 days after negotiating shipping documents through overseas correspondent banks.
Failure to comply will result in restrictions on access to both valid and non-valid foreign exchange transactions, including the processing of Form M applications.
Sanctions become progressively harsher with repeated violations. First-time offenders will be restricted from the market for 90 days, while a second violation attracts a 180-day restriction. A third offence carries a 360-day restriction, while a fourth breach results in a complete ban from participating in the foreign exchange market.
Banks that fail to report such defaults could also face penalties, including warning letters and a N10 million fine for each affected transaction.
Exporters Given Clear Repatriation Deadlines
The revised manual also places greater responsibility on exporters to ensure timely repatriation of export proceeds.
For non-oil exports, proceeds must be repatriated and credited into exporters' domiciliary accounts within 180 days of shipment. In the oil and gas sector, export proceeds are required to be received within 90 days.
Exporters who fail to comply with these timelines will be penalised one per cent of the naira value of outstanding proceeds, while banks that fail to enforce compliance will face fines equivalent to 0.5 per cent of the outstanding amount.
Additionally, the CBN retains powers to sanction banks for delays in approving export documentation, failure to remit export supervision levies, and non-compliance with reporting requirements relating to export proceeds.
Operational Reforms Introduced to Improve Market Efficiency
Alongside the stricter enforcement regime, the CBN introduced several reforms aimed at reducing bottlenecks and improving efficiency within the foreign exchange market.
Among the key changes is an increase in the allowable advance payment for imports from 15 per cent to 30 per cent. The regulator also introduced a permissible import shortfall or excess margin of plus or minus 10 per cent of the Cost and Freight value captured on Form M.
In a move expected to ease the export process, the CBN removed processing fees associated with Form NXP, the document used for export transactions.
The updated framework further expands provisions covering service exports, technology-related remittances, transactions conducted through the Pan-African Payment and Settlement System (PAPSS), non-resident investment accounts, and tuition fee remittances of up to $25,000 per semester for undergraduate and postgraduate studies abroad.
Another notable change is the removal of the mandatory Form A requirement for remittances funded through ordinary domiciliary accounts, although banks are still required to verify the legitimacy and purpose of such transactions.
Stakeholder Consultations Shaped New Framework
The CBN disclosed that the revised manual was developed following extensive consultations with banks, exporters, corporate organisations, regulators, and development partners.
According to the apex bank, the reforms are intended to support a transparent, rules-based, and market-oriented foreign exchange system capable of attracting investment, improving compliance levels, boosting market confidence, and enhancing the overall integrity of Nigeria's FX market.
CBN Governor, Olayemi Cardoso, had earlier stated that the initiative reflects the institution's commitment to strengthening macroeconomic stability and modernising the administration of foreign exchange in Nigeria.
He noted that evolving global economic conditions, domestic structural adjustments, and ongoing reforms within the foreign exchange market made the review necessary.
The Deputy Governor, Corporate Services Directorate, Dr Muhammad Abdullahi, described the revised manual as part of broader reforms aimed at restoring confidence, improving transparency, deepening liquidity, and enhancing market efficiency.
He said the review was designed to align Nigeria's foreign exchange framework with prevailing market realities and international best practices.
“Our goal is to reduce transaction frictions, improve processing timelines, deepen market confidence, encourage formal market participation, and create a more seamless and efficient experience for legitimate users of Nigeria’s foreign exchange market,” he said.