Introduction

Welcome to the first edition of our Regulatory Updates for 2025—a year that promises new directions, fresh policies, and transformative regulations. As businesses and regulatory bodies adapt to a rapidly changing ecosystem, this digest is designed to bring you the most relevant developments, spotlighting changes shaping the regulatory environment.

This edition looks at CBN's January initiatives to bolster the foreign exchange market, improve liquidity, and foster engagement from Nigerians living abroad. Additionally, it highlights FCCPC's steps to enhance the telecommunications sector, with other regulatory bodies' efforts to guide the technology ecosystem towards positive growth.

By highlighting these updates and their potential effects, we aim to equip you with the insights needed to navigate the complexities of the regulatory ecosystem effectively.

A quick summary...

1. CBN publishes the Foreign Exchange Code.
2. CBN suspends extension of export proceeds on behalf of exporters.
3. CBN introduces non-resident Nigerian ordinary account & non-resident Nigeria investment account.
4. NITDA partners with NFIU to facilitate the Financial Action Task Force (FATF)  grey-list removal.
5. FMCIDE to invest in broadband infrastructure to boost internet services.
6. NCC partners with FCCPC to enhance consumer protection.
7. NCC approves a 50% increase in telecoms services.
8. Federal Ministry of Industry, Trade, and Investment (FMITI) releases strategic roadmap for 2025.
9. High Court dismissed a data breach claim for lack of sufficient evidence.
10. Kenya mandates social media companies to open physical offices in Kenya.
11. South Sudan orders 3 months of social media blackout.

• Regulatory Policy Publication

CBN Publishes the Nigerian Foreign Exchange (FX) Code

The Central Bank of Nigeria (CBN) published the Nigeria Foreign Exchange (FX) Code which sets out standards to strengthen and promote the integrity of Nigeria's foreign market. To ensure compliance, the Code requires market participants to do the following:

1. Conduct a self-assessment on their level of compliance and submit the report to the CBN by January 31, 2025;
2. Prepare a detailed implementation plan approved and signed by its board and submit to the CBN; and
3. Submit a quarterly report on the level of compliance with the Code to the Financial Market Department (FMD). The first report is due March 31, 2025.

It is important to note that failure to comply will attract administrative penalty, including monetary fines.

Implementing the Code will promote transparency and ethical behaviour among market participants, which will enhance trust, attract foreign investment, and aid Nigeria in integrating into the global financial market as it draws from global best practices. A detailed article on the FX Code and how market participants can ensure compliance will be published soon.

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Suspension of Extension of Export proceeds on behalf of Exporters

The CBN introduced a significant update impacting the business community, particularly exporters, with the issue of its circular titled “Suspension of Extension of Export Proceeds on Behalf of Exporters.” What this means is that the CBN will no longer grant extensions for the repatriation of export proceeds requested by authorised dealer banks on behalf of their customers.

In addition, exporters are now required to adhere strictly to the stipulated timelines for repatriation. For non-oil exports, proceeds must be repatriated within 180 days from the bill of lading date. For oil and gas exports, proceeds must be repatriated within 90 days from the bill of lading date.

This circular underscores the CBN’s commitment to ensuring timely repatriation of export proceeds and maintaining stability in the foreign exchange market. Authorised dealers are encouraged to review their processes to ensure compliance with the new guidelines.

Introduction of Non-Resident Nigerian Ordinary Account & Non-Resident Nigeria Investment Account

The CBN introduced two new financial instruments, the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA), aimed at enhancing liquidity and encouraging participation from Nigerians in the diaspora. These accounts provide streamlined options for remittances and investments, reducing reliance on intermediaries while facilitating secure transactions in both foreign and local currencies. The NRNOA allows non-resident Nigerians to remit foreign earnings, supports deposits in multiple currencies, and enables unrestricted repatriation of foreign currency balances. Whereas, the NRNIA facilitates investment in Nigeria through various assets and simplifies the repatriation process for funds without requiring an Electronic Certificate of Capital Importation.

This initiative is expected to yield significant macroeconomic benefits, such as increased foreign exchange liquidity, enhanced diaspora investment participation, and strengthened financial inclusion. By simplifying financial transactions and addressing key challenges faced by non-resident Nigerians, the CBN aims to deepen diaspora engagement and promote economic growth. Successful implementation will depend on regulatory efficiency and continuous engagement with non-resident Nigerians to ensure these accounts meet their intended objectives. If effectively executed, this initiative could reinforce the role of the diaspora in Nigeria’s economic development, driving diversification and job creation while boosting investor confidence.

Nigeria Moves Closer to FATF Grey List Removal: NITDA Partners with NFIU

The National Information Technology Development Agency (NITDA) and the Nigerian Financial Intelligence Unit (NFIU) have partnered to strengthen Nigeria's compliance with international anti-money laundering and counter-terrorism financing standards. The two agencies outlined strategies that leverage technology and intelligence-sharing to improve compliance and align with FATF requirements. This is following Nigeria's grey-listing by the Financial Action Task Force (FATF) in February 2023, which imposed operational burdens on businesses, increasing compliance costs, limiting foreign investments, and restricting access to global financial systems.

This partnership signals progress toward creating a more transparent and trustworthy financial system. If successful, businesses will benefit from reduced regulatory risks, enhanced access to international markets, and an improved investment climate, driving growth across sectors. Furthermore, it reinforces Nigeria's commitment to combating financial crimes, which could boost confidence among global investors and trading partners

FMCIDE Plans to Improve Broadband Services

The Federal Ministry of Communications, Innovations and Digital Economy (FMCIDE) announced the Federal Government's plans to deploy 90,000km of fiber-optic infrastructure nationwide to ensure nationwide access to quality broadband services. This move emphasises the government’s focus on securing significant investments to make this ambitious initiative a reality, addressing connectivity gaps across urban and rural areas.

This investment in broadband infrastructure could transform the business environment by improving internet access, reducing connectivity costs, and fostering digital innovation. For businesses, especially in underserved areas, it promises better access to digital tools, increased productivity, and opportunities to leverage e-commerce and remote work models. Additionally, this expansion will likely attract foreign and local investors in the telecoms sector, driving growth across Nigeria's digital economy and creating a more inclusive ecosystem.

NCC and FCCPC Join Forces to Enhance Consumer Protection in the Telecoms Sector

The Nigerian Communications Commission (NCC) and the Federal Competition and Consumer Protection Commission (FCCPC) formalised their collaboration through a Memorandum of Understanding (MoU) to enhance consumer protection and promote fair competition in Nigeria's telecommunications sector. This strategic partnership addresses the need for seamless coordination between the two regulators, particularly in areas where their mandates overlap, such as consumer protection and market competition. The MoU emphasises creating a transparent and competitive environment for telecom operators while prioritising the interests of consumers.

This collaboration signals stricter oversight for telecoms operators, particularly in their consumer engagement practices and market behaviours. Companies operating in the sector may need to review their compliance frameworks to ensure alignment with both NCC and FCCPC standards. For consumers, the partnership promises improved service delivery, faster dispute resolution, and better enforcement of consumer rights in the telecoms industry. Additionally, the MoU reinforces the regulators' commitment to fostering a competitive market, which could lead to more innovative services and pricing strategies in the sector.

NCC Approves 50% Telecoms Services Tariff Increase

The NCC approved a significant 50% increase in tariffs for telecommunications services, a decision rooted in the rising operational costs faced by service providers. This move is part of a broader strategy aimed at ensuring the sustainability of the telecommunications industry, which has been grappling with various economic pressures. The NCC's decision reflects an urgent need to address these financial strains to maintain service quality and industry viability.

While the tariff increase is designed to bolster the operational capabilities of telecoms companies, it also raises critical questions about its implications for consumers and the overall market landscape. Concerns about the possibility that higher tariffs could lead to increased costs for end-users, potentially limiting access to essential communication services, particularly among low-income populations.

Ministry of Industry, Trade, and Investment Unveils 2025 Strategic Roadmap

The Federal Ministry of Industry, Trade, and Investment (FMITI) released its strategic roadmap titled "Accelerating Diversification to Rebuild Prosperity by Leveraging Industry, Trade & Investment." This comprehensive plan outlines the Ministry's commitment to fostering economic diversification, enhancing trade revenue, and mobilising investments. Key initiatives include the implementation of policies to create an enabling environment for industrialisation, digitisation, creative art, manufacturing, and innovation. A significant component of this strategy is the nationwide census of Micro, Small, and Medium Enterprises (MSMEs), aimed at developing a precise, data-driven roadmap to empower these enterprises.

The Ministry's 2025 roadmap presents significant opportunities for businesses across various sectors. The focus on creating an enabling environment through policy reforms is expected to reduce regulatory bottlenecks, making it easier for businesses to operate and expand. The planned MSME census will provide valuable data to inform support programs, potentially leading to increased access to resources and markets for small and medium-sized enterprises. Additionally, the emphasis on industrialisation and innovation may open avenues for businesses to engage in new projects and partnerships, contributing to economic growth and diversification. Companies should stay informed about these developments to align their strategies with government initiatives and capitalise on emerging opportunities.

High Court Dismisses Privacy Claim for Lack of Sufficient Evidence

A Lagos State High Court dismissed a data breach claim made by a lawyer ("Applicant") against a popular supermarket ("Respondent") in Lagos for lack of sufficient evidence. The Applicant claimed that the Respondent collected and stored their personal data without proper consent or transparency, failed to provide a privacy policy on its website, and did not inform customers adequately about a recent data breach affecting one of its outlets. The Applicant sought several declarations from the court, including a declaration that the Respondent's actions interfered with their constitutional right to privacy and violated specific provisions of the Nigeria Data Protection Act (NDPA) 2023 and the Nigeria Data Protection Regulations (NDPR) 2019. However, the Court dismissed the claim due to insufficient evidence. The court held that the Applicant failed to put forward sufficient evidence to show that the Respondent's processing of personal data could result in a data breach or violate the Applicant's privacy rights.

This case underscores the importance of robust data protection practices for businesses operating in Nigeria. While the court dismissed the claim due to lack of evidence, the lawsuit highlights the increasing scrutiny on how companies handle personal data.

Kenya Mandates the Physical Establishment of Social Media Companies

The Kenyan government has mandated that all social media companies operating within its borders establish physical offices in Kenya. This initiative is part of a broader strategy to address escalating concerns regarding misinformation and online harassment, particularly among youths, as local teams can better understand cultural nuances and community standards in Kenya, helping them tailor their moderation policies more effectively to combat culturally inappropriate content. In addition, physical offices facilitate closer collaboration between social media platforms and local authorities to identify and address sources of disinformation quickly.

The initiative could create new employment opportunities for local communities. However, there are valid concerns regarding its potential impact on freedom of expression and innovation.

South Sudan's NCA Orders Social Media Blackout

The South Sudanese government, through the National Communication Authority (NCA), has mandated telecommunications companies to suspend access to social media for a duration of up to three months. This decision is a response to escalating tensions and violence associated with unrest in neighbouring Sudan. However, the NCA lifted the ban on all social media platforms after 5 days saying the ban had achieved the objectives, as the graphic contents had been taken down.

While the shutdown aims to safeguard public safety following recent violent incidents, it simultaneously raises significant concerns regarding freedom of expression and access to critical information during a crisis. Given that social media serves as a vital communication channel for many, the repercussions of this directive will be closely monitored as South Sudan navigates these challenging circumstances.

This new year, staying informed about regulatory changes is crucial for businesses seeking to thrive in a dynamic environment. The regulatory initiative outlined in this edition not only highlights the government's commitment to fostering a transparent and efficient regulatory framework but also presents opportunities for growth and innovation across various sectors. As we move forward, proactive engagement with these developments will be essential for leveraging potential benefits and ensuring compliance in an increasingly interconnected world.

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