Newscenter Media News The Central Bank of Nigeria (CBN) has issued a new directive requiring foreign investors to provide concrete evidence of their investment transactions before they can repatriate funds or divest their holdings.
This move is aimed at ensuring transparency and accountability in the foreign investment landscape.
In a circular signed by W. J. Kanya, acting director, trade and exchange department, on Thursday, the CBN said its directives in the foreign exchange manual, memorandum 20 section 2 (vi), apply to both divestments and repatriation of all certificates of capital importation (CCI) related transactions.
CCI, a certificate issued by an authorised dealer on behalf of the CBN, is issued to a foreign investor as evidence of an inflow of foreign direct capital investment, either as equity or debt; cash or goods.
Additionally, they must provide evidence of the redemption of local currency assets, such as money market instruments, debt securities, or equities.
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In the circular, CBN clarified its second requirement, saying investors need to provide evidence of redemption of investment in local currency assets, which includes money market instrument, debt securities, and equities.
“This is to clarify that the Foreign Exchange Manual, Memorandum 20 section 2 (vi) applies to both divestments and repatriation of all Certificate of Capital Importation (CCI) related transactions,” CBN said.
“For the avoidance of doubt, every divestment or repatriation of foreign investment be it a pre-liquidation or matured investment, should present the following documents:
“a) Evidence of electronic Certificate of Capital Importation. b) Evidence of redemption of investment in local currency assets (money market instrument, debt securities, equities, etc.).”
This directive, which applies to both pre-liquidation and matured investments, is a clear indication of the CBN’s determination to strengthen its oversight of foreign capital inflows and outflows. By demanding more stringent documentation, the apex bank hopes to curb illicit financial flows and prevent capital flight.
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