CBN bars international Oil companies From transferring 100% Foreign exchange proceeds offshore in one instance

The Central bank of Nigeria has, in a bid to solve the problems of manipulations and over-looked impacts of unregulated activities by some sectors, especially in the export-trade sector, barred foreign Oil companies from repatriating %100 of their foreign earnings. CBN bars international Oil companies 

The national banker’s bank, CBN, said international oil firms are at liberty to repatriate 50% of their earnings in a single transaction and then can withdraw the other half after 90 days.

This was made effective and released in a circular dated February 14, 2024 by the Director of Trade and Exchange Department at the CBN, Hassan Mahmud.

According to the CBN, observations have been made which revealed that proceeds of crude oil exports by International Oil Companies (IOCs) operating in Nigeria are being sent offshore to fund parent accounts of the IOCs. CBN bars international Oil companies

The Apex Bank described this action as “cash pooling” and explained that it has a “negative” impact on liquidity” of Nigeria’s forex market.

The Circular read, “This has an impact on liquidity in the domestic foreign exchange market. CBN bars international Oil companies

“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.” CBN bars international Oil companies

Here within the article are two pages of the Circular issued by the CBN February 14, 2024 on REQUIREMENTS FOR FOREIGN CURRENCY CASH POOLING ON BEHALF OF INTERNATIONAL OIL COMPANIES (IOCs) IN NIGERIA.

Page 2.