CBN Demands Transaction Evidence on All Divestments, Repatriation of Foreign Investments

James Emejo in Abuja

The Central Bank of Nigeria (CBN), yesterday clarified that  every divestment or repatriation of foreign investment, be it a pre-liquidation or matured investment, should present documented evidence.
These evidence of electronic Certificate of Capital Importation (CCI) as well as evidence of redemption of investment in local currency assets (money market instrument, debt securities, equities among others).

The apex bank provided the clarification in a correspondence titled,
“Circular on Memorandum 20-22 of the Foreign Exchange Manual”, dated August 8, 2024, and signed by CBN acting Director, Trade and Exchange Department, Dr. W.J. Him, which was addressed to all Authorised Dealer Banks (ADBs) and the public.
Essentially, the circular explained that the Foreign Exchange Manual, Memorandum 20 section 2 (vi) applies to both divestments and repatriation of all CCI related transactions.

The section spells out the procedure for portfolio investment.
It stated that the prospective investor must appoint a local bank or broker as an agent to purchase the instrument; the funds for the investment are transferred electronically to a designated bank; on receipt of the funds, the bank issues the investor with an electronic Certificate of Capital Importation within 24 hours; Authorised Dealers shall keep separate records of the investment and render returns to CBN in a format that will be advised from time to time.

Also, with the eCCI, the investor through the bank or broker, accesses the market and invests in any instrument of choice.
The manual further stipulates that “If at any point in time the investor wants to divest, they shall go back to the bank with the following documents: a. Evidence of electronic Certificate of Capital Importation; b. Evidence of redemption of the money market instrument.”

The memorandum further stated that only funds in-flowed through authorised dealers by resident/non-resident Nigerian national and companies specifically for the purpose of investment shall be eligible.
It added that exports and ordinary domiciliary account balances shall not be eligible for the investment.

The revised Foreign Exchange Manual is compiled and issued by the CBN pursuant to the powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act 17, of 1995 LFN Cap F34.
The document is intended as a guide to authorised dealers, authorised buyers and the  public in processing foreign exchange transactions.