The Central Bank of Nigeria (CBN) has eased the earlier restrictions on repatriating foreign exchange proceeds for international oil companies operating within the nation. According to a circular issued on May 6, 2024, authored by Hassan Mahmud, the Director of the Trade and Exchange Department, these oil firms are now allowed to allocate 50% of their repatriated export earnings towards their financial commitments.
Previously, in February, the CBN had restricted these companies from transferring 100% of their foreign exchange proceeds to their parent companies abroad all at once. The policy stipulated that international oil companies could initially repatriate only 50% of their proceeds, with the remainder to be transferred after a 90-day interval.
The updated directive clarifies that the initial 50% of the repatriated funds can be pooled immediately or whenever necessary. Banks representing these oil companies may request cash pooling in advance of receiving the funds, provided they furnish the necessary documentation for CBN approval.
Furthermore, the remaining 50% of repatriated proceeds can now be used to meet various financial obligations within Nigeria as needed during the designated 90-day period. Eligible payments from this portion include petroleum profit tax, royalties, payments to domestic contractors, cash calls, domestic loan repayments, transaction taxes, education taxes, and forex transactions within the Nigerian Foreign Exchange Market.
