CBN stops foreign oil companies from remitting 100% of forex proceeds abroad

The Central Bank of Nigeria (CBN) has stopped international oil companies from repatriating 100% foreign exchange proceeds to their mother companies overseas at once.

The apex bank said international oil companies can repatriate 50% of their proceeds in the first instance and then the other half after 90 days. The Director of Trade and Exchange Department at the apex bank, Hassan Mahmud, made this known 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. In line with the ongoing reforms in the foreign exchange market, it has become necessary to take measures to address this trend.