The Federal Government of Nigeria has launched a 9-month Voluntary Currency Disclosure, Depositing, Repatriation, and Investment Scheme under Executive Order No. 15 of 2023. The initiative, known as the Disclosure Scheme, is aimed at encouraging Nigerians holding foreign currency—whether domestically or abroad—to voluntarily disclose and deposit these funds into Nigerian banks. This initiative is designed to integrate foreign currency into the formal economy, boosting transparency and economic growth.
The announcement was made by the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who emphasized that the program is part of the government’s commitment to economic stability, anti-money laundering (AML) efforts, and ensuring that foreign currency assets are incorporated into Nigeria’s formal financial system.
Objectives and Benefits of the Disclosure Scheme
Mr. Edun highlighted that the Disclosure Scheme has several key objectives aimed at strengthening Nigeria’s financial infrastructure:
- Integrating foreign currency: The scheme seeks to bring foreign currency currently outside the formal financial system into the economy.
- Promoting transparency: It aims to foster greater financial transparency and support Nigeria’s economic resilience.
- Anti-money laundering: The program aligns with global AML and Countering the Financing of Terrorism (CFT) standards, ensuring that disclosed funds are not used for illicit purposes.
- Economic growth: The funds will help drive economic development by adding liquidity to the financial sector and boosting the country’s fiscal position.
Key Features and Incentives for Participants
The Disclosure Scheme offers several incentives to encourage participation:
- Tax Immunity: Funds disclosed under the scheme will not be subject to tax audits or liabilities.
- Asset Protection: Disclosed assets will be safeguarded from expropriation or seizure by the government.
- Confidentiality: All disclosed information will be kept highly confidential, ensuring participants’ privacy.
- Interest and Repatriation Flexibility: Participants will earn tax-free interest on the disclosed funds and can repatriate their foreign currency at the prevailing exchange rate.
Additionally, the government has assured that participating financial institutions will adhere to existing AML/CFT regulations, ensuring that the scheme is not misused for illegal activities such as money laundering or terrorism financing.
Eligibility and Participation Process
The Disclosure Scheme is open to Nigerians holding legally obtained, internationally tradable foreign currency. The scheme is voluntary, allowing individuals to open or maintain domiciliary accounts with designated Nigerian banks to participate.
To take part in the program, eligible individuals must complete a three-step process:
- Open a domiciliary account with a participating financial institution.
- Complete an application form provided by the Central Bank of Nigeria (CBN).
- Deposit the disclosed foreign currency into a designated sub-account.
The funds deposited will be managed according to the specific guidelines issued by the CBN, ensuring compliance with regulatory standards.
Duration and Economic Implications
The Disclosure Scheme will be open for a period of nine months, starting from its launch date. The initiative is expected to significantly enhance Nigeria’s fiscal position by integrating unaccounted-for foreign currency into the formal economy. The increase in liquidity could improve financial stability and bolster the country’s efforts to meet its economic growth targets.
This program is part of a broader economic vision by the Federal Government to create an inclusive and transparent financial environment that aligns with international best practices.
What You Should Know
- The Disclosure Scheme aims to integrate foreign currency into Nigeria’s formal economy, enhancing financial transparency and stability.
- Eligible participants can disclose and deposit foreign currency into designated domiciliary accounts with participating banks.
- The scheme provides tax immunity, asset protection, and confidentiality for participants, along with flexibility in repatriating funds.
- The initiative runs for a nine-month window, providing an opportunity for Nigerians to formalize their foreign currency holdings.
As Nigeria seeks to strengthen its economic framework, the Disclosure Scheme represents a key step in enhancing the integration of foreign currency into the formal financial sector while adhering to international standards on financial transparency and anti-money laundering practices.
