CBN amends FEM, targets $35bn remittances in local market

By Odunewu Segun

In other to further increase foreign portfolio investments in the country, Central Bank of Nigeria has amended the Foreign Exchange Manual to allow an inflow of remittances and foreign exchange earnings in the local debt and money market instruments.

The apex bank had issued a circular recently which amends the Memorandum 21 of the Foreign Exchange Manual to allow forex inflows of Nigerian individuals as well as companies, resident and non-resident alike to be invested in the local debt, equities and money market instruments.

The circular which was signed by CBN’s acting Director for Trade and Exchange Department, W.D Gotring, is aiming to encourage portfolio investments, allows Nigerian national or companies who in-flowed foreign currencies through authorized dealers, to invest the funds in money market instruments, bonds and equities.

The amended memorandum reads “a resident/non-resident Nigerian national and/or entities and foreign national or entity may invest in Nigeria by way of purchase of money market instruments such as commercial papers, negotiable certificates of deposits, bankers acceptances, Treasury Bills, etc.”

ALSO SEE: CBN readmits FBN, Sterling, 6 others back to FX market

This, the CBN said is subject to provision of evidence of remittance of funds, board resolution of local beneficiary authorizing the investment (in the case of a company) as well as the purpose of the capital importation.

The apex bank however stated that balances on export domiciliary and ordinary domiciliary accounts will not be eligible for the investments.

The CBN boss, who delivered a lecture to participants of the Senior Executive Course 38 at the National Institute of Policy and Strategic Studies in Kuru, Plateau State at the weekend, stated that the fundamental quest of the bank is to attain an inclusive growth by bolstering the country’s productive capacity and ensuring that the Nigerian economy is indeed self-sufficient in every sense of the word.

According to data from Global Knowledge Partnership on Migration and Development, remittances into Nigeria totalled $20.8 billion in 2015 and it is also expected to rise to $35 billion by the end of 2016.