Regulatory Alerts2007-12-28 | TED-FEM-FPC-GEN-01-008-08Guidelines For The Payment of Refund of Excess Paris Club Debt
This letter, dated December 24, 2007, from the Central Bank of Nigeria details guidelines for handling the refunds of excess Paris Club exit debt to states. Following the payment of Paris club debts with funds from excess crude and PPT accounts, some states had extra deductions from their allocations. The CBN will transfer USD amounts allocated to respective states into designated banks' offshore Foreign Exchange Market (FEM) accounts. These banks should credit the beneficiary states' domiciliary accounts as soon as they are created. Interest accrued on funds shall be transferred to the beneficiaries, and banks can pay appropriate interest on balances pending their use by the states. Funds cannot be disbursed in USD cash; instead, they will be converted to Naira at the prevailing interbank exchange rate on the date of request. States can utilize these funds for offshore payments related to eligible transactions such as opening letters of credit with appropriate documentation and governor's authorization.