CBN Simplifies Capital Importation Policy

importation

In order to ensure the country gets back portfolio investors to further shore up Nigeria’s Forex reserve, the CBN has revised its capital importation policy.

In a statement signed by W.T Gotring, interested investors both local and international who ”inflowed foreign currency through an Authorized Dealer are henceforth allowed to invest such funds in money market instruments, bonds and equities”.

This decision is coming less than a month after the CBN banned all forex dealers from accessing the discount window of the CBN on the settlement date for government securities’ auctions.

The apebank said ”Memorandum 21 of the Foreign Exchange Manual on the subject is hereby amended as follows”:

“A resident/ non- resident Nigerian national and/or entities and foreign national or entity may invest in Nigeria by way of purchase of money market instruments such as Commercial Papers, Negotiable Certificates of Deposits, Bankers Acceptances, Treasury Bills, etc subject to the following documentation requirements”.

a. Tested SWIFT message evidencing the remittance of funds;

b. Board resolution of the local beneficiary authorizing the investment (in the case of a company);

c. Purpose of capital importation specified in the SWIFT message

d. Evidence of incorporation where applicable.

However, the CBN said all export funds, domiciliary deposit and account balances are restricted from benefitting from the new memorandum. Only funds inflowed from authorised dealers will be allowed to benefit from the process.

Investors can also get their money out easily by showing capital information certificate and evidence of sale of their money market instruments.

It will be interesting to see how this latest policy will increase inflow of capital. The latest capital importation report by the National Bureau of Statistics, NBS showed that capital importation fell by 76% in last one year.

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