Tag Archive for: Central Bank of Nigeria

This information is courtesy of Advocaat Law Practice in Lagos, Nigeria.

Below is a summary of the information contained in recent circulars issued by the Central Bank of Nigeria.

Automation of Form NXP on the Trade Monitoring System (TED/FEM/FPC/GEN/01/003).

The CBN issued the above circular to all authorized dealers, Nigerian Customs Service (NCS), pre-shipment
inspection agents and the general public notifying them of the automation of Nigerian Export Proceeds (NXP)
Form from October 31, 2019, the e-form NXP will replace the hard copy Form ‘NXP’ for commercial exports (Oil &
Gas and Non-Oil). The e-form ‘NXP’ application is a mandatory document that must be completed by all exporters
for shipment of goods outside Nigeria. The CBN also mandates exporters to obtain a valid Tax Identification
Number (TIN) from the Federal Inland Revenue Service (FIRS)/Joint Tax Board (JTB) as this will be a prerequisite
for customers to access the Trade Monitoring System for e-form ‘NXP’ application.

The Trade Monitoring System for e-form ‘NXP’ application can be accessed at www.tradesystem.gov.ng.

Revised guidelines for the registration of cash-in-transit and currency processing companies (COD/DIR/GEN/INM/13/132).

The CBN’s revised Guidelines for the Registration of Cash-In-Transit (CIT) and Currency Processing Companies
(CPC) (Guidelines) for the registration of cash-in transit and currency processing companies in Nigeria is in
furtherance of the circular on “Notice to Companies Providing Currency Sorting and Distribution Services and
Deposit Money Banks providing these Services for themselves or other Banks in Nigeria”, earlier released in 2009
by the CBN. As a result of the Guidelines, all entities that engage in or intend to engage in currency distribution
and/or currency processing services in Nigeria, either for themselves or for other Bank(s) must register with the
CBN. In addion to other registration requirements, prospective cash –in-transit and and currency processing
companies (CPC) companies must have a minimum share capital of N1 billion for National CIT and N500 million
for a Regional CIT.

Furthermore, companies who intend to provide both CIT and currency processing services are required to meet
all the requirements for registration as specified under CIT and CPC Guidelines. They are required to have a
minimum share capital of N4.0 billion whilst companies registered to operate both Regional CPC and CIT shall
have a minimum share capital of N2.5 billion. Banks desirous of providing currency processing and distribution
services can jointly (two or more banks) float a subsidiary company which must meet the registration
requirements for CIT and CPC and be subject to the regulatory and supervisory framework of the CBN.

For addional informaon on the circular, please refer to:
hps://www.cbn.gov.ng/Out/2019/CCD/Revised CIT and CPC Guidelines 2019.pdf

Implementation of the cashless policy (PSM/DIR/GEN/CIR/01/016).

The CBN had by a circular exempted some institutions from the cash less policy which required that deposits and
withdrawals above N500,000 (Five Hundred Thousand Naira) for individuals and N3,000,000 (Three Million
Naira) for corporate entities on bank account attract additional charges. The exempted institutions are:

a) Revenue generating accounts of the Federal, State and Local Governments;

b) Embassies, Diplomatic Missions, Multilateral Agencies, Aid Donor Agencies in Nigeria, Ministries,
Departments and Agencies of Government (revenue collection only);

c) Mobile Money Operators (Float accounts only); and

d) Micro-finance Banks (MFBs) and Primary Mortgage Institutions (PMIs) accounts with DMBs.

However, with effect from March 31, 2020, the above instuons will no longer be exempted from CBN’s cashless
policy.

For addional informaon on the circular, please refer to:
hps://www.cbn.gov.ng/Out/2019/PSMD/Implementaon of the Cashless Policy.pdf

Regulation for the operation of indirect participants in the payment system (PSM/DIR/CON/CWO/02/091).

The CBN released a Regulation for the Operation of Indirect Participants in the Payments System (the Regulation), which will take effect from 11 November, 2019. The Regulation applies to indirect participants in the payment
system and it is aimed at setting out the procedures for effective integration of indirect participants in the
payments system in Nigeria, standardizing the operation of indirect participants in the payments system,
providing mechanism and framework for the clearing, settlement of indirect participants payment instruments
through the direct participating banks and strengthening indirect participants for effective contribution to digital
financial services in Nigeria.

Indirect participant refers to a licensed deposit-taking institution which is a non clearing financial institution but
settles its payments obligations through direct participating banks. For an institution to qualify as an indirect
participant, such institution is expected to have a satisfactory risk-based rang from the CBN and secure a leer
of recommendation from its direct participating bank duly signed by the Chief Risk Officer and an Executive
Director of the direct participating bank; and must comply with the Nigeria Uniform Bank Account Number
(NUBAN) Standards.

For addional informaon on the circular, please refer to:
hps://www.cbn.gov.ng/Out/2019/PSMD/Circular and Regulaon for the Operaon of Indirect Parcipants in
the Payments System (002).pdf

 

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Sources: [1], [2]. Image sources: [1], [2].

Nigeria’s currency, the naira, will become one of three West African currencies that the United Kingdom’s export finance agency will add to its list of pre-approved currencies, allowing it to provide financing for transactions with Nigerian businesses denominated in the local currency. The other two currencies have not yet been disclosed.

Paul Arkwright, the British High Commissioner to Nigeria, stated that this is a clear indication of how much value the UK places on its relationship with Nigeria, and that it will provide a firm foundation for a significant increase in trade and investment between both countries.

Britain voted in 2016 to leave the European Union, which has forced London to rethink its trade ties with the rest of the world. The UK and the EU struck an agreement in December that opened the way for talks on future trade ties.

The naira financing will follow the same structure as a someone buying in Britain’s sterling, except that Nigerian firms taking out a loan in the local currency can benefit from a UK government-backed guarantee.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, and Remuneration needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Source: [1]. Image source: [1].