Foreign Investors and prospective investors in Africa’s most populous nation often question whether a Certificate of Capital Importation is a statutory approval of capital inflow in Nigeria.
What is a CCI (Certificate Capital Importation)?
Although the 1995 Foreign Exchange (Monitoring and Miscellaneous Provisions) Act (the “Foreign Exchange Act”) provided for a certificate of capital importation, the Revised Foreign Exchange Manual specified an electronic certificate of capital importation (e-CCI).
The CBN (Central Bank of Nigeria) issued the Revised Foreign Exchange Manual further to the Foreign Exchange Act.
A commercial bank generates an electronic certificate of capital importation to confirm a Nigerian enterprise received foreign currency or goods as equity or loan.
Similarly, capital importation is an inflow of foreign currency or goods such as plants, machinery, and equipment), mainly as equity or loan in a Nigerian enterprise.
Timeline for Obtaining an e-CCI
Under the Foreign Exchange Act, a Nigerian bank must electronically issue an e-CCI to an investor within 24 hours of the capital importation and return to the CBN within 48 hours after delivering the e-CCI to the investor.
Investment without an e-CCI
Nigeria’s investment landscape is replete with investors and commercial banks that suffered regulatory fines for repatriating investments not evidenced under an e-CCI.
The CBN penalized affected banks a total of NGN5.87 billion and ordered MTN Nigeria Communications Limited to refund US$8.134 billion to Nigeria after its examination revealed how four Nigerian banks, between 2007 and 2015, used irregular certificates of capital importation to fraudulently repatriate foreign currency at US$8.134 billion on behalf of MTN Nigeria offshore investors.
Necessarily, such repatriation of investment proceeds breached the statutory requirements of the Foreign Exchange Act and the Foreign Exchange.
Moreover, investing in a Nigerian enterprise without an e-CCI means the investor cannot lawfully repatriate any such investment proceeds.
Essence of an e-CCI
An e-CCI is a statutory proof of investment in a Nigerian enterprise, not an approval. Furthermore, an e-CCI guarantees an unconditional transferability of any foreign currency imported into and invested in a Nigerian entity.
The investor is empowered to repatriate investment-related dividends or profits (net of taxes), loan servicing payments for foreign loans, remittance of proceeds (net of taxes), and other obligations in case of enterprise sale, liquidation, or divestment.
Subject to the money laundering regime in Nigeria, no governmental approval is required to import capital into Nigeria.
Conclusion
An electronic certificate of capital importation is statutory proof of capital imported into Nigeria, not approval.
Any foreign investor cannot legally repatriate any capital imported into Nigeria without an e-CCI, and such an investor loses all lawful benefits attached to investing in Nigeria.
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