CBN tightens rules on foreign investors

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 dispose of their holdings.

This move is aimed at ensuring transparency and accountability in the foreign investment landscape.

In a circular signed by WJ Kanya, acting director, department of trade and exchange, on Thursday, the CBN said its directive in the foreign exchange manual, memorandum 20 section 2 (vi), applies to the divestment and repatriation of all transactions related to capital import certificates (CCIs).

CCI, a certificate issued by an authorized dealer on behalf of the CBN, is issued to foreign investors as evidence of inflow of foreign direct capital investment, either in the form of equity or debt; cash or goods.

In addition, they must provide evidence of redemption of local currency assets, such as money market instruments, debt securities, or equities.

READ ALSO:CBN investigates alleged EcoBank violations

In the circular, the CBN clarified the requirements for both, saying investors would need to provide evidence of liquidation of investments in local currency assets, which include money market instruments, debt instruments and equities.

“This is to clarify that the Foreign Exchange Manual, Memorandum 20 section 2 (vi) applies to the divestment and repatriation of all transactions relating to Capital Import Certificates (CCIs),” the CBN said.

“For the avoidance of doubt, any divestment or repatriation of foreign investment, whether still in the pre-liquidation stage or has matured, must include the following documents:

“a) Electronic proof of Capital Import Certificate. b) Proof of redemption of investment in local currency assets (money market instruments, bonds, equities, etc.).”

The directive, which applies to pre-liquidation and matured investments, is a clear indication of the central bank’s determination to strengthen its oversight of foreign capital inflows and outflows. By requiring stricter documentation, the central bank hopes to curb illicit financial flows and prevent capital flight.

CBN tightens scrutiny on foreign investors first appeared on Latest Nigeria News | Top Stories from Ripples Nigeria.