Godwin Emefiele, the Governor of Central Bank of Nigeria [CBN] has said the regulator is prepared to enforce the repatriation of dollar-proceeds from exports and is planning sanctions against those not complying.

Nigeria, Africa most populous nation and largest economy, has seen a more than 50 percent drop in global oil prices lead to over 20 percent drop in the value of the naira against the dollar.

In February, the CBN introduced trading rules under which banks will be able to purchase foreign exchange only if they have a prior order from a corporate customer, such as a fuel importer or foreign mobile phone company looking to repatriate profits or dividends.

Now, policy makers are looking at exporters to ensure hard currency liquidity within Nigeria, pondering sanctions against exporters who fail to repatriate proceeds and funnel them back into the official market within the stipulated 90-day limit, Emefiele said.

“If you refuse to sell your export proceeds that you repatriate in the foreign exchange market, we will ban them from accessing foreign exchange in the Nigerian foreign exchange market,” Emefiele said.

He explained that much of the pressure on the naira over the past year was due to activity of importers and exporters, the former frontloading purchases of hard currency while the latter were hoarding their overseas cash earnings.

The resulting hiatus on the currency markets has forced the central bank to intervene, and this has led to a steep drop in Nigeria’s foreign cash reserves to four to five months’ worth of imports.

Forcing exporting and importing companies to comply with existing regulations on their use of the currency market was now necessary.

“Another thing we will do is that we will ask the banks not to loan money to them (exporters who don’t repatriate hard cash on time),” he said, saying the measure would come into effect soon, but declining to give a date.

Emefiele estimated that some $3-4 billion of proceeds due to be repatriated were outstanding, of which 40 percent would come from oil companies.

“We are saying don’t put your foreign exchange in the hands of people who want to carry cash and take it abroad,” he said. “Use it to import tangible items that are documented.”

Also scrapped amid February’s de facto devaluation were the bi-weekly auctions in which the central bank sold foreign currency at a predetermined rate. Emefiele said these would not be reintroduced.

“(The window) is not closed. It is crushed and destroyed for life,” said Emefiele. “Nothing is going to be opened again. We are not going to go back to a subsidised regime.”