The Central Bank of Nigeria (CBN) wants everyone to understand the rules for taking out and bringing back foreign investments related to the Certificate of Capital Importation (CCI).
Dr. W.J. Kanya, who is in charge of the Trade & Exchange Department at CBN, explained what documents you need for these kinds of money moves. CBN wants everyone to follow the rules when dealing with foreign money.
The rules come from the Foreign Exchange Manual, specifically a part called Memorandum 20, section 2(vi). This part talks about both taking out (divesting) and bringing back (repatriating) investments connected to CCI transactions.
CBN Wants Proof of Transactions
To make sure everyone is following the rules, CBN says that whenever you take out or bring back foreign investments, you need to show two important documents:
- Proof of electronic Certificate of Capital Importation: This shows that the initial investment was correctly recorded.
- Proof of redemption of investment in local money: This includes proof like money market instruments, debt securities, equities, or other local currency assets.
CBN says: “Remember, the Foreign Exchange Manual, Memorandum 20 section 2 (vi), applies to both divestments and repatriation of all CCI-related transactions.
“Every time you divest or repatriate foreign investments, you need to show these documents:
“a) Proof of electronic Certificate of Capital Importation. b) Proof of redemption of investment in local money (money market instrument, debt securities, equities, etc.).”
These documents are crucial for making sure foreign investments in Nigeria go smoothly and legally.
CBN urges everyone involved in these transactions to follow these rules to avoid breaking the law.
Things to Know
The Foreign Exchange Manual from CBN, first made in 1995 and last updated in 2018, gives detailed guidance on foreign money transactions in Nigeria.
Earlier, CBN stopped International Oil Companies (IOCs) in Nigeria from sending all their foreign money back to their headquarters right away.
Initially, IOCs could only send back 50% of their money immediately and had to wait 90 days to send the rest.
CBN later clarified how IOCs should use their foreign money and said that IOCs could sell the other 50% of their foreign money to authorized forex dealers.
According to Newslodge, foreign direct investors sold off three times more of their assets in Nigeria, reaching $200 million as per the CBN’s economic report for the third quarter of 2023.
This shows more and more international companies are selling off their businesses in Nigeria and moving activities elsewhere.