The Central Bank of Nigeria (CBN) has relaxed its restriction on the repatriation of foreign exchange proceeds by international oil firms operating in the country.
In a circular dated May 6, 2024 signed by the Director, Trade and Exchange Department, Hassan Mahmud, the CBN stated that oil firms will henceforth be allowed to spend 50% balance of the repatriated export proceeds on financial obligations.
The CBN had in February, stopped international oil companies from repatriating 100% of their foreign exchange earnings to their home countries at a go, insisting that they made the remittances in two tranches of 50 percent each and at least 90 days apart.
In its reviewed position however, the CBN states that: “Following the recent enquiries by banks and other stakeholders on our circular referenced TED/FEM/PUB/FPC/001/004, in respect of Cash Pooling requests by banks on behalf of IOCs, we provide further clarifications as follows:
“The initial 50% of the repatriated proceeds can be pooled immediately or as at when required. Banks may submit the request for cash pooling ahead of the expected date of receipt, supported by the required documentations, for approval by the Central Bank of Nigeria,” the apex bank said.
“The 50% balance of the repatriated export proceeds could be used to settle financial obligations in Nigeria, whenever required, during the prescribed 90-day period.”
The CBN said petroleum profit tax, royalty, domestic contractor invoices, cash call, domestic loan principal and interest payment, transation taxes, education tax and forex sales at the Nigerian Foreign Exchange Market are eligible for settlement from the balance 50%.
