Monday, February 23, 2015

CBN Reads Riot Act to Exporters (Export Proceeds to now be sold to Banks only)

The Central Bank of Nigeria (CBN) has warned that any exporter that utilises its export proceeds for non-eligible transactions will be barred from the foreign exchange market.

The central bank gave the warning in a circular dated February 20, signed by the Director, Trade and Exchange Department, CBN, Mr. Olakanmi I. Gbadamosi that was posted on its website at the weekend.

The document titled: “Re: Unfettered Access to Fund in Export Proceeds Domiciliary Accounts,” was a clarification on the provisions of memorandum 26, paragraph (5), section (D) of the foreign exchange manual.

The central bank explained that following different interpretation of the aforementioned sector of the foreign exchange manual, it became imperative to clarify the term ‘unfettered access,’ as contained in the provisions.

It informed all authorised dealers and the general public that the term ‘unfettered access’ granted to holders of export proceeds domiciliary accounts shall be strictly construed to mean that the proceeds of the exports in the account can only be used by the exporters to finance eligible and other related transactions supported with appropriate documentation as well as those sold to authorised dealers (banks) for eligible transactions only.

(You can download the CBN circular on this via

“Any exporter that henceforth utilises the export proceeds for non-eligible transactions will be barred from the foreign exchange market in Nigeria.

“Please be guided accordingly and ensure strict compliance,” it added.

The central bank had last week also said exporters who fail to repatriate their earnings into their domiciliary accounts within the stipulated period will be barred from the foreign exchange market.

In an earlier circular also signed last Thursday by Gbadamosi, the CBN had asked all authorised dealers to ensure strict compliance with its provisions.

It had cited provisions of paragraph (4), memorandum (11) of the foreign exchange manual in respect of the repatriation of export proceeds.

“Proceeds of oil and non-oil exports are to be repatriated into the export proceeds domiciliary accounts of their respective exporters’ accounts within 90 days for oil exports and 180 days for non-oil exports, failing which the collecting banks will be liable to a fine of 10 per cent of the FOB value of the transaction, including other appropriate penalties as provided in the Banks and Other Financial Institutions Act (BOFIA) Act of 1991, as amended.

“Where an exporter fails to repatriate the proceeds into the domiciliary account within the stipulated period, the exporter will be barred from participating in all the segments of the foreign exchange market in Nigeria,” it stated.

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