Nigeria will enforce the repatriation of dollar-proceeds from exports and is planning sanctions against those not complying, Central Bank of Nigeria (CBN) governor, Godwin Emefiele, told Reuters yesterday in an interview.
Nigeria has been hit hard by a steep drop in oil prices and uncertainty over a closely fought and delayed election.
This has seen the naira lose more than 20 per cent against the dollar since the middle of 2014, breaking through the important 200 per dollar level last month as it racked up the biggest monthly loss in more than five years.
The CBN In February, introduced trading rules under which banks would be able to purchase foreign exchange only if they have a prior order from a corporate customer, such as a fuel importer or foreign mobile phone company looking to repatriate profits or dividends.
Now, the CBN is looking at exporters to ensure hard currency liquidity within Nigeria, threatening sanctions against exporters who fail to repatriate proceeds and funnel them back into the official market within the stipulated 90-day limit.
“If you refuse to sell your export proceeds that you repatriate in the foreign exchange market … we will ban them from accessing foreign exchange in the Nigerian foreign exchange market,” Emefiele said.
According to him, much of the pressure on the naira over the past year was due to activity of importers and exporters, the former frontloading purchases of hard currency while the latter were hoarding their overseas cash earnings.
“Another thing we will do is that we will ask the banks not to loan money to them (exporters who don’t repatriate hard cash on time),” he said, saying the measure would come into effect soon, but declining to give a date.
Emefiele said that forcing exporting and importing companies to comply with existing regulations on their use of the currency market was now necessary.
He estimated that some $3-4 billion of proceeds due to be repatriated were outstanding, of which 40 per cent would come from oil companies.
“We are saying … don’t put your foreign exchange in the hands of people who want to carry cash and take it abroad,” he said. “Use it to import tangible items that are documented,” he explained.
Leadership news – culled from: http://leadership.ng/business/416748/repatriation-of-dollar-proceeds-cbn-to-sanction-erring-exporters