As you already know as from January 2016, Central Bank of Nigeria will place a complete ban on using Naira cards (Naira based debit and credit cards) to pay for services/products in foreign currency or to make with ATM withdrawals abroad. This comes as CBN tries to tight its grip on Dollar flight from the economy and the present government’s bid to battle corruption.

However, this has affected many Nigerians at home and abroad who hitherto depended on their Naira cards (debit/credit) to carry out transactions ranging from students who pay school fees, business owners who import some products to startups who pay for hosting and other services online.

Note: You can still use your Naira cards for payments in local currency (Naira) (online, POS or ATM withdrawals).

The question is how do you overcome this challenge and keep either your business afloat or sustain yourself as a student? We are going to look at a solution to tackle this issue.

Domiciliary Account/Foreign Currency based debit card
Worthy to note, the limitations in transactions is only limited to Naira cards (Naira based debit/credit cards), hence you can open a domiciliary account (Euro, Dollar or Pounds Sterling based) with any bank and request for debit card (MasterCard or VISA). After opening this account, the next challenge is funding the account. Earlier in August, 2015 the Central Bank had banned/restricted payment of cash into domiciliary accounts in the country, so you may not be able to buy dollar, pounds or euros from black market and deposit cash to your domiciliary account. A statement released then reads in part:

“Therefore, in its continued efforts to stop illicit financial flows in the Nigerian banking system which aligns with the anti-money Laundering stance of the Federal Government, the CBN hereby prohibits from the date of this circular the acceptance of foreign currency cash deposits by Deposit Money Banks (DMBs). “For foreign currency cash lodgments made prior to the date of this circular, the account holder has the option to either withdraw his or her foreign currency cash or the Naira equivalent.

For the avoidance of doubt, only wire transfers to and from Domiciliary Accounts are henceforth permissible. “The CBN advises individuals that wish to source foreign currency for eligible and legitimate purposes such as BTA, PTA medical, mortgage, school fees, goods etc. to do so through recognized channels with the use of Form ‘A’ for “invisible” and Form ‘M’ for “visible” transactions.”

So how do you fund the domiciliary account?

The CBN restriction is not outright, as you are allowed to deposit of dollars into your domiciliary account in some cases. However, some banks totally reject physical deposit of dollars into domiciliary accounts.

Option 1: Direct Deposit
In a case your bank accepts deposit, you can buy dollar from any Bureau De Change or black market and deposit into the account. But if your bank doesn’t, you can use option below.

If you are a student, note that CBN says you can access dollars to pay for school fees and or student maintenance allowances. To get the dollars all you need to do is walk up to your bank and show proof. For e.g school fees, tuition etc. The bank is expected to sell the dollars to you once you provide these documents.

Note: You may not be allowed to transfer money out of your account if the dollars sitting in your account was deposited physically.However, if the dollars was wired to you, then you can transfer it without restriction.

Option 2: Use Form ‘A’ or Form ‘M’ to request for foreign currency.
If your imports are not included in the banned list http://nairametrics.com/cbn-bans-toothpick-indian-incense-and-these-38-other-imported-items-from-fx-market/ then you can apply for forex through your bank by filling a Form A for invincible transactions and Form M for visible transactions.
Electronic Foreign Exchange forms (e-form M) and (e-form A) were introduced by the Central Bank of Nigeria (CBN) and Nigeria Customs Service (NCS). The pilot phase for the processing of electronic form M commenced November 22, 2012, while the full implementation begins on December 06, 2012.

Features & Benefits e-form M and e-form A
The automation of international trade transactions and
Reduction of turnaround time from importation to the clearing stage of all international trade transactions.

The requirements for accessing and using the single window platform include:
– Registration of Taxpayer Identification Number (TIN) at Federal Inland Revenue Service (FIRS) offices.
– Validation of TIN by Customers with existing TIN at FIRS offices.
– Logging on to FIRS portal to register as ‘importer’.
– Logging on to https://app.trade.gov.ng/formx by Bank/customer to initiate the e-Form ‘M’.
– Forwarding all original documents (Proforma Invoice, Insurance etc.) to the Bank for approval.
– Kindly note that e-mail notifications will be sent to you once the Form M is approved by the Bank and also when the Form M is accepted/rejected by the Scanning Company.

Here is a guide on how to fill form M

Option 3: Wire Transfer
You can have a friend or BDC operator wire foreign currency to your account while you pay them the Naira equivalent. This way you can avoid depositing cash, however, banks often scrutinize any wire transfer in foreign currency vigorously before approval.

Once you have funded your domiciliary account, you can then transfer money to your debit card and use at your discretion or make wire transfer payment for products/services.

source: http://nairabrains.com/2015/12/cbn-ban-on-naira-cards-how-to-make-foreign-payments/

Tougher than expected.. .

This good news for we foreign student.

I still can't see any hope where I can make foreign payments like the ones on Ebay or AliExpress.

Kindly throw more light on this.