CBN Stops IOCs From Remitting 100% Of Forex Proceeds Abroad

The CBN prohibits foreign oil companies from sending their entire foreign exchange earnings overseas.

International oil companies are no longer able to immediately repatriate 100% of their foreign exchange profits to their parent companies abroad, thanks to a decision by the Central Bank of Nigeria (CBN).

International oil companies can repatriate half of their proceeds after 90 days, and 50% of their proceeds in the first instance, according to the apex bank.

This was announced in a circular dated February 14, 2024 by Hassan Mahmud, the Director of Trade and Exchange Department at the top bank.

“Cash pooling” is the term used by the CBN to describe the practice of International Oil Companies (10Cs) operating in Nigeria transferring their crude oil export proceeds to parent accounts overseas.

“This has an impact on liquidity in the domestic foreign exchange market.

“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 10Cs, 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,” the apex bank stated.