How Importers and Exporters Are Adapting to CBN’s New Policies

Trade operators in Nigeria are swiftly adapting to a more stringent and transparent foreign exchange (FX) and trade regulatory environment.

The Central Bank of Nigeria (CBN) has phased out the previous Price Verification System (PVS) for Form M applications, enforced stricter deadlines for repatriating export earnings, and introduced a comprehensive FX Code of Conduct for banks and market participants, alongside other significant reforms.

Below is an overview of how importers and exporters are navigating these regulatory shifts:

Accelerated Repatriation of Export Proceeds

The CBN now mandates that exporters repatriate and credit their foreign currency earnings within fixed timeframes: 180 days for non-oil exports and 90 days for oil and gas shipments, calculated from the bill of lading date. Extensions are no longer granted.

To comply, companies are revising contractual terms to align with these deadlines, optimizing production and shipping schedules, and selecting transport routes with minimal delays. Additionally, many are implementing milestone tracking systems in collaboration with their banks to ensure timely compliance.

Increased Bank Due Diligence Following PVS Removal

With the elimination of the PVS requirement for Form M, importers face heightened scrutiny from banks, which now demand more comprehensive documentation. This includes detailed invoices, competitive price comparisons, and thorough supplier vetting before approving Form M applications and FX transactions.

Businesses are strengthening their documentation processes by maintaining factory proforma invoices, freight and insurance quotations, and detailed product specifications to expedite bank validations.

Promoting Transparent FX Practices Under the Nigeria FX Code

The Nigeria FX Code, introduced by the CBN, establishes ethical standards and operational guidelines covering execution, information sharing, risk management, and settlement procedures. Market participants now expect transparent pricing, documented dealer mark-ups, improved trade confirmations, and robust internal controls.

Many organizations are formalizing internal standard operating procedures (SOPs) that define who can request FX quotes, the number of quotes required, and how approvals are documented, facilitating smoother audits and stronger bank relationships.

Strategies to Manage FX Volatility and Timing Challenges

• Synchronize cash flows with regulatory timelines: Exporters plan shipments to ensure proceeds are received well within the 90- or 180-day windows; importers coordinate deposit schedules and letter of credit (LC) terms with realistic vessel arrival dates.
• Utilize letters of credit: Employ confirmed LCs on higher-risk trade routes to secure payment and delivery terms, reducing disputes.
• Establish natural hedges: Companies engaged in both importing and exporting balance dollar inflows and outflows to minimize net FX exposure.
• Incorporate price adjustment clauses: Contracts now often include provisions to adjust prices based on naira fluctuations at shipment or delivery.
• Build operational buffers: Allow extra lead time in logistics to avoid missing repatriation deadlines or Form M validity periods.

Rigorous Documentation as a Competitive Edge

Despite the removal of the PVS, maintaining meticulous documentation remains critical. Leading importers keep updated supplier KYC records, signed proforma invoices, packing lists, and third-party freight and insurance quotes.

They also preserve comprehensive shipment evidence-including bills of lading, terminal receipts, and inspection reports-and ensure clear linkage between Form M, LCs or remittances, and the actual goods received. This thorough documentation accelerates bank approvals and safeguards against future compliance inquiries under the FX Code.

Optimizing Routes and Ports to Mitigate Timing Risks

Exporters are increasingly selecting shipping routes with fewer transshipments and partnering with reliable carriers to meet the 90- and 180-day repatriation deadlines. Some are adopting earlier booking strategies, utilizing bonded warehouses, and enhancing export documentation to reduce delays that could jeopardize compliance.

Proactive Collaboration with Banks

Given the compliance risks banks face, traders now engage relationship managers earlier in the process-prior to order placement or cargo confirmation-to ensure appropriate structuring of Form M applications, LC types, tenors, and settlement methods.

Many firms request pre-clearance checklists and maintain centralized trade file repositories, which streamline FX automation and post-trade compliance checks.

Cash Flow Management Aligned with Repatriation Regulations

Stricter repatriation deadlines have prompted exporters to enhance forecasting of dollar inflows and align these with naira working capital requirements. Importers similarly schedule deposits and LC maturities based on realistic estimated time of arrivals (ETAs).

Companies are avoiding compliance pitfalls by strengthening local banking credit lines and improving inventory turnover rates.

Enhancing Governance Within Trading Teams

To comply with the FX Code, CFOs are tightening controls over FX quote requests, trade document sign-offs, rate approvals, and form submissions.

Many organizations have implemented dual authorization for rate acceptance, standardized email templates for quote requests, and daily “FX blotters” that log received quotes, selected dealers, and final rates-facilitating transparent internal and regulatory reviews.

Implications for Costs and Market Competitiveness

While the immediate effect of stricter timelines and enhanced bank scrutiny may increase administrative workload, the medium-term benefits include reduced delays, clearer pricing, and stronger banking partnerships.

Early adopters who improve documentation, synchronize logistics with cash flows, and institutionalize FX discipline transform compliance into a strategic advantage-securing faster approvals and confidently offering competitive quotes to customers.