The Central Bank of Nigeria (CBN) has prohibited international oil corporations from repatriating their whole foreign exchange revenues to their parent companies overseas at once.
According to the central bank, international oil corporations can repatriate 50% of their revenues immediately, followed by the other half after 90 days.
Hassan Mahmud, Director of Trade and Exchange Department of the apex bank, said this in a circular dated February 14, 2024.
The CBN said it observed that proceeds of crude oil exports by International Oil Companies (IOCs) operating in Nigeria are transferred offshore to fund parent accounts of the IOCs in a phenomenon described as “cash pooling”.
“This has an impact on liquidity in the domestic foreign exchange market,” the apex bank stated.
“In line with the ongoing reforms in the foreign exchange market, it has become necessary to take measures to address this trend. Consequently, the CBN hereby directs as follows;
“Banks are allowed to pool cash on behalf of IOCs, subject to a maximum of 50% of the repatriated export proceeds in the first instance;
“The Balance 50% may be repatriated after 90 days from the date of inflow of export proceeds.”