No More Extensions for Export Proceeds Repatriation"

In a decisive move to tighten foreign exchange controls, the Central Bank of Nigeria (CBN) has suspended all approvals for the extension of export proceeds repatriation timelines, effective immediately. The directive, outlined in a circular dated January 8, 2025, impacts both oil and non-oil export transactions, signaling a stricter enforcement of existing forex regulations.

The New Mandate

Signed by Dr. W.J. Kanya, acting Director of CBN’s Trade & Exchange Department, the circular references the Foreign Exchange Manual (Revised Edition, March 2018), particularly Memoranda 10A (23a) and 10B (20a), as the basis for the policy. Exporters are now required to strictly adhere to the stipulated repatriation timelines:

Non-oil export proceeds: Repatriated within 180 days of the bill of lading date.

Oil and gas export proceeds: Repatriated within 90 days of the bill of lading date.

“For the avoidance of doubt, proceeds of oil and non-oil exports are to be repatriated and credited into the exporters’ export proceeds domiciliary accounts within the specified timelines,” the circular emphasized.

Stricter Oversight

The CBN’s decision imposes stringent obligations on exporters and their authorized dealer banks, requiring strict compliance with the repatriation rules. Banks must inform their clients of these updated regulations and ensure adherence, with the apex bank warning that non-compliance could result in penalties or other regulatory actions.

Why This Matters

The policy is part of CBN’s broader efforts to enhance foreign exchange inflows and bolster Nigeria’s foreign reserves amid ongoing economic challenges. Export proceeds are a vital source of forex for the country, and delays in repatriation have hindered liquidity and stability in the market.

Last year, the CBN introduced similar measures targeting international oil companies (IOCs) operating in Nigeria, requiring them to repatriate 50% of forex proceeds immediately and the remainder within 90 days. Additionally, rules governing cash pooling by IOCs mandated prior CBN approval for repatriation, with detailed expenditure statements required for compliance.

Implications for Exporters

Exporters now face a non-negotiable deadline to repatriate proceeds, which could challenge businesses accustomed to leniency in meeting these timelines. The new rules also heighten the responsibilities of authorized dealer banks, which must ensure full compliance or risk facing sanctions themselves.

A Renewed Push for Forex Stability

This latest policy underscores CBN’s commitment to tightening forex policies to address Nigeria’s ongoing economic concerns. By enforcing stricter repatriation rules, the apex bank aims to ensure that export proceeds contribute directly to the nation’s forex reserves, reducing pressure on the naira and improving market stability.

As the policy takes effect, all eyes will be on exporters and financial institutions to see how they navigate the heightened compliance landscape and contribute to Nigeria’s forex objectives.