Nigeria - Conversion and Transfer Policies Nigeria - Conversion Policies
All foreign transfers are done through banks, and foreign currency for most transactions is procured through local banks in the inter-bank market. The official Central Bank of Nigeria (CBN) window for procuring foreign exchange, namely the Retail Dutch Auction System, was discontinued in February 2015. Local banks also issue foreign currency-denominated debit cards to customers who have domiciliary accounts. ATM Naira-denominated cards issued by local banks can be used internationally for transactions and cash withdrawals, but such transactions have a ceiling of the daily local cash withdrawal limit of Naira 150,000 (approximately USD 750). Low value foreign exchange may also be procured at a premium from foreign exchange bureaus, called Bureau De Change (BDC).
The CBN has intensified its interventions in the foreign exchange market in an attempt to maintain the stability and strength of Naira in the face of lower oil prices. The CBN’s foreign exchange reserves fell from $39.5 billion in late 2014 to $29 billion at the end of 2015. As oil prices continued dropping the CBN has increasingly restricted access to dollars in order to maintain the exchange rate. In January 2016, CBN announced that Bureaus de Change would no longer be supplied with official foreign exchange from the central bank. As it has become more difficult to obtaining dollars at the official exchange rate of approximately 200 naira/dollar, the parallel rate that has fluctuated between 240 and 300 in the first quarter of 2016. American businesses have expressed strong concern about the CBN’s increasing unwillingness to provide foreign exchange and report the restrictions prevent them from repatriating Naira-denominated earnings. Foreign exchange demand remains high because of the dependence on foreign inputs for manufacturing and refined petroleum products. In June 2015, the CBN published a list of 41 product categories which could no longer be imported using official foreign exchange channels. Affected businesses (American and Nigerian) have complained publicly and privately that the policy in effect bans the import of some 700 individual items and severely hampers their ability to source inputs and raw materials.
The NIPC guarantees investors unrestricted transfer of dividends abroad (net a 10 percent withholding tax). Companies must provide evidence of income earned and taxes paid before externalizing dividends from Nigeria. Money transfers usually take no more than 48 hours, if individuals provide the necessary documentation. In 2015, the CBN implemented restrictions on foreign exchange remittances. All such transfers must occur through banks. Such remittances may take several weeks depending of the size of the transfer and the availability of foreign exchange at the remitting bank. Transfers of currency are protected by Article VII of the International Monetary Fund (IMF) Articles of Agreement (http://www.imf.org/External/Pubs/FT/AA/index.htm#art7).
Nigeria is not a member of the Financial Action Task Force. It is a member of Intergovernmental Action Group Against Money Laundering in West Africa (GIABA).