The Central Bank of Nigeria (CBN) has issued a clarification regarding the repatriation of export proceeds, stating that 50 per cent of the balance can be used to settle financial obligations within the country during the 90-day period.
In a circular dated May 6, 2024, signed by CBN Director, Trade and Exchange Department, Dr. Hassan Mahmud, the apex bank addressed inquiries from banks and stakeholders regarding cash pooling requests by International Oil Companies (IOCs).
According to the circular, banks may submit cash pooling requests ahead of the expected receipt date, supported by required documents, for approval by the central bank. Expenses such as petroleum profit tax, royalty, domestic contractor invoices, and others are eligible for settlement from the balance 50 percent.
This clarification follows policy interventions introduced in February aimed at boosting FX liquidity, including limiting IOCs to repatriate a maximum of 50 percent of export proceeds initially, with the balance allowed after 90 days. Additionally, the CBN banned the cash payment of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA), mandating electronic disbursement only.
The CBN highlighted the impact of IOCs’ repatriation practices on domestic FX liquidity and emphasized the need for minimal negative impact on the Nigerian FX market.
