CBN Cracks Down on Divestments, Foreign Investments, Requires Proof of Repatriation

The Central Bank of Nigeria (CBN) has issued a new circular to clarify existing rules regarding the Certificate of Capital Importation (CCI) for forex repatriation and divestment.

The circular, signed by Dr. W.J. Him, Acting Director of the Trade & Exchange Department, mandates that every divestment or repatriation of foreign investment—whether pre-liquidation or matured—must be accompanied by two key documents: evidence of an electronic Certificate of Capital Importation (CCI) and evidence of redemption of investment in local currency assets.

The CBN's directive is part of its efforts to ensure full compliance with foreign exchange regulations. The circular emphasized that "every divestment or repatriation of foreign investment should present documented evidence," including the electronic CCI and proof of redemption in money market instruments, debt securities, equities, or other relevant local currency assets.

The Foreign Exchange Manual, specifically Memorandum 20 section 2(vi), outlines the procedure for portfolio investment. It requires prospective investors to appoint a local bank or broker as an agent to purchase the instrument.

Funds for the investment must be transferred electronically to a designated bank, which then issues the investor with an electronic CCI within 24 hours. Authorized Dealers are required to keep separate records of the investment and render returns to the CBN in a specified format.

The CBN's clarification aims to facilitate smooth and lawful foreign investment transactions in Nigeria. The revised Foreign Exchange Manual, compiled and issued by the CBN under the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act 17 of 1995 LFN Cap F34, serves as a guide for authorized dealers, buyers, and the public in processing foreign exchange transactions.