The Central Bank of Nigeria (CBN) has demanded transaction evidence for repatriation and divestment of foreign investments.

In a circular signed by W. J. Kanya, Acting Director of the Trade and Exchange Department, the CBN emphasised that the guidelines outlined in its foreign exchange manual, particularly Memorandum 20, Section 2 (vi), apply universally to all Certificate of Capital Importation (CCI) transactions.

The CCI, a critical document issued by authorised dealers on behalf of the CBN, serves as proof of foreign direct capital investment in Nigeria, whether in the form of equity, debt, cash, or goods.

Details of CBN's new foreign exchange manual

The circular clarified that foreign investors seeking to divest must present specific documentation to their banks.

These documents include an electronic Certificate of Capital Importation and proof of redemption of investments in local currency assets, which cover money market instruments, debt securities, and equities.

The circular reads:

"This is to clarify that the Foreign Exchange Manual, Memorandum 20 section 2 (vi) applies to both divestments and repatriation of all Certificate of Capital Importation (CCI) related transactions.

"For the avoidance of doubt, every divestment or repatriation of foreign investment be it a pre-liquidation or matured investment, should present the following documents: a) Evidence of electronic Certificate of Capital Importation. b) Evidence of redemption of investment in local currency assets (money market instrument, debt securities, equities etc.)

"Please note and be guided accordingly."

Foreign investors repatriate over N300 billion

The directive arrives when foreign investors have been liquidating their portfolio investments in Nigeria at a significantly higher rate.

According to a report by the Nigerian Exchange (NGX) Limited titled "Domestic & Foreign Portfolio Investment," foreign investors liquidated N311.41 billion worth of portfolio investments in the first half of 2024, a sharp increase from N73.06 billion in the same period in 2023.

The Cable reports that this is in contrast; foreign investment inflows were reported at N229.07 billion for the first half of 2024, up from N72.02 billion in the corresponding period last year.