Investor Presentaiton
1801448
16
KPMG
The Country and its
institutions
Business Organisation Labour and Social
and Regulation
Security Regulations
The Nigerian Financial Tax System
Services Industry
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods Exportation of Goods
COVID-19 Economic
and Fiscal Measures
The Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 (FEMMP
Act) replaced the Exchange Control Act (1962), the Exchange Control (Anti-Sabotage) Act
(1984), the Foreign Currency (Domiciliary Accounts) Act 1985 and the Second-tier Foreign
Exchange Market Act (1986), which hitherto restricted dealings in foreign exchange.
The FEMMP Act liberalised dealings in foreign exchange at the Autonomous Foreign
Exchange Market (AFEM) in 1995. The foreign exchange market was further liberalised
in October 1999 with the introduction of the Inter-Bank Foreign Exchange Market (IFEM).
The FEMMP Act provides that, except where a transaction is prohibited by law, any
transaction adequately supported by appropriate documentation shall be an eligible
transaction for the purchase of foreign exchange in AFEM/IFEM. The major highlights of
the FEMMP Act are:
(i) retention of foreign currency in domiciliary accounts;
(ii) permission of payment for foreign equity investment with cash or equipment,
machinery, spare parts, raw materials and other business assets;
(iii) relaxation of controls on dividend remittance and equity capital repatriation; and
(iv) procurement and repayment of foreign loans and interest thereon without prior
ministerial approval.
$424552
Pounds
Five
Hundred Naira
600
300298162
500
wever MERKELT BLAN
50
52
6.2
6.1
Inter-bank Foreign Exchange Market (IFEM)
The participants at IFEM include authorised dealers, authorised buyers, oil
companies, oil service companies, exporters, end-users and any other entity that
the CBN may designate from time to time.
The permissible instruments for dealing in the market are convertible foreign
currencies, foreign bank notes, foreign coins, travellers' cheques, bank drafts, mail
or telegraphic transfers and other money market instruments approved by the CBN.
Based on the flexible exchange rate policy launched by the CBN on 15 June 2016,
exchange rates at the IFEM are to be determined by market forces. All eligible
foreign exchange transactions supported by appropriate documentation, can be
carried out through the IFEM, except for those listed as 'Not Valid for Foreign
Exchange' in the CBN Circular of 23 June 201552.
Foreign Currency Domiciliary Accounts
Corporate bodies, individuals and firms can maintain and operate domiciliary
accounts in any internationally convertible currency in any bank in Nigeria.
Exporters of goods are specifically required to open domiciliary accounts where
their entire export proceeds are to be lodged. Holders of the account are given the
discretion to retain foreign currencies in the account or have the funds converted to
Naira.
Generally, foreign currency domiciliary account holders have unfettered access to
funds in their accounts with minimum documentation.
The CBN issued two Circulars on 17 April 2015 and 21 May 2015, on Currency
Substitution and Dollarisation of the Nigerian Economy. The Circulars stipulate
that it is an offence for any person or body corporate to refuse to accept the Naira
as the legal tender currency for the payment of goods and services in Nigeria.
The Circulars, however, exempt the following revenue generating agencies of
government and operators permitted by law (and any other agency that may be
prescribed by the CBN from time to time):
• The Federal Inland Revenue Service
• Nigerian Ports Authority
• Nigerian Maritime Administration and Safety Agency
. Federal Airport Authority of Nigeria
Nigerian Airspace Management Agency
The list of imported goods and services that are not valid for foreign exchange has subsequently been reviewed to include fertilizer and
textile products. On 17 May 2017, the CBN issued a Circular stating certain categories of items which are still valid for foreign exchange in
the official foreign exchange market. To clarify, the Circular provided the description and Harmonized System Codes of the eligible items.
Investment in Nigeria Guide - 8th Edition 62View entire presentation