Central Bank of Nigeria (CBN) has amended the memorandum 21 of the foreign exchange manual to give room for foreign currency investment in fixed income instruments and equities. This is in a continued effort to encourage portfolio investment into the country.
Henceforth, the CBN said resident Nigerian nationals/or companies who inflowed foreign currency through an authorised dealer are allowed to invest such funds in money market instruments, bonds and equities.
Consequently, the amended version the FX manual reads: “A resident and 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, among others, subject to certain documentation requirements.”
Such requirements include tasted SWIFT message evidencing the remittance of funds, board resolution of the local beneficiary authorising the investment (in the case of a company), purpose of capital importation specified in the SWIFT message and evidence of incorporation where applicable.
One of the procedures for resident/non-resident Nigerian National and companies investing in portfolio investment is the prospective investor appoints a local bank or broker as an agent to purchase the instruments. The funds for the investment are transferred electronically to a designated bank.
On receipt of the fund, the bank issues the investors with a certificate of capital importation within 24 hours. The CBN said the authorized dealer shall keep separate records of the investment and render returns to CBN.
“For the avoidance of doubt, only funds inflowed through authorized dealer for resident/non-resident Nigerian national and companies specifically for purpose of investment shall be eligible. Consequently, balances on exports domiciliary and ordinary domiciliary accounts shall not be eligible for the investment”, Groting W.D, acting director, trade and exchange department of the CBN said in a circular.
