Understanding framework for operation of non-resident Nigerian ordinary account

The Central Bank of Nigeria (CBN) last week unveiled two innovative financial accounts—the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA)—to boost liquidity and encourage greater involvement of Nigerians in the Diaspora in the country’s economic activities.

The initiative is strategically designed to strengthen ties between Nigerians abroad and the domestic economy by providing streamlined avenues for financial transactions and investments.

According to the CBN, the NRNOA allows Non-Resident Nigerians (NRNs) to remit foreign earnings into Nigeria and manage their funds in both foreign and local currencies. This dual functionality provides a safe and secure environment for handling financial transactions, enhancing convenience for account holders.

Similarly, the NRNIA offers an opportunity for NRNs to invest in a variety of assets within the country, broadening their financial options with the flexibility of using either foreign or local currencies.

A circular from the apex bank, signed by W. J. Kanya, acting director of the trade and exchange department, highlighted the benefits of these accounts. The CBN noted that these specialised accounts are crafted to empower the Diaspora community to contribute more effectively to Nigeria’s socio-economic development.

“Non-Resident Nigerians now have improved access to opportunities in the Nigerian economy,” the CBN said. The NRNIA, in particular, offers access to investment instruments such as the Nigeria Diaspora Bond and other debt securities specifically targeted at Diaspora investors.

The initiative addresses several challenges that NRNs face in managing their finances and participating in domestic investments. By eliminating the reliance on intermediaries, these accounts reduce risks and inefficiencies, ensuring direct access to funds and investments.

According to the framework for the operation of these accounts, the NRNOA allows NRNs to remit foreign earnings to Nigeria while maintaining funds in both foreign currency (FCY) and local currency (Naira) accounts. These accounts are flexible and offer several key features.

NRNOA accounts can hold freely convertible foreign currencies as specified by the CBN. Account holders may also maintain Naira accounts, with funds remitted from offshore or converted from FCY accounts at prevailing exchange rates through authorised dealers. The account facilitates deposits of foreign income, such as salaries, allowances, dividends, and rental income, and supports personal expenses like family maintenance, education, and healthcare. Interest earned on deposits is subject to Nigerian tax laws.

FCY balances can be fully repatriated out of Nigeria without restriction. Interest rates are negotiable with the preferred bank. Funds can be freely converted to Naira at prevailing exchange rates through authorised dealers. The accounts align with international Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) standards.

The NRNIA is designed to facilitate investments in Nigeria, providing account holders with access to both foreign and local currency-denominated assets.

Requirements for opening the accounts

To open these accounts, individuals must provide a valid Nigerian passport or an expired passport accompanied by a valid foreign passport or residence permit. Alternative documents, such as evidence of Nigerian citizenship of either parent, are also acceptable. Proof of residency, utility bills in the applicant’s name, tax receipts, and bank statements may be required. Additionally, U.S. investors must complete applicable IRS FATCA forms.

Digital platforms will play a pivotal role in onboarding and Know Your Customer (KYC) updates for these accounts. Banks are expected to integrate with the NIBSS NRBVN platform to facilitate the acquisition of Bank Verification Numbers (BVNs) for NRNs. These platforms are designed to ensure seamless account management and authentication.

The CBN’s framework ensures that FCY balances in both NRNOA and NRNIA accounts can be repatriated without restrictions. For Naira balances, repatriation is permitted provided there is evidence of prior foreign inflows and conversion to local currency for investments. No eCCI (Electronic Certificate of Capital Importation) is required for fund remittances.

The NRNIA enables Diaspora Nigerians to participate in local and foreign currency-denominated financial instruments, including Nigeria’s equities and local debt markets. Investments in these markets are conducted in Naira, providing a streamlined process for portfolio diversification.

The introduction of the NRNOA and NRNIA by the CBN represents a significant step toward enhancing Diaspora engagement in Nigeria’s economy. By providing secure, flexible, and efficient platforms for financial transactions and investments, these accounts empower NRNs to contribute to the country’s growth while enjoying the convenience of direct access to opportunities back home.