The Central Bank of Nigeria (CBN) has placed a 50% initial limit on the transfer of proceeds from crude exports by international oil companies (IOCs) to offshore parent company accounts.
The CBN in a circular dated February 14, 2024, signed by Hassan Mahmud, director, trade and exchange department, noted that due to the ongoing reforms in the foreign exchange market, it is necessary to take measures to reverse the trend.
In the circular, banks can only transfer 50 per cent of repatriated export proceeds, on behalf of the IOCs, to their parent company offshore accounts – with the remaining 50 per cent repatriated after 90 days.
“While the CBN strongly supports the need for IOCs to have easy access to their export proceeds, particularly to meet their offshore obligations, this must be done with minimal negative impact on liquidity in the Nigerian foreign exchange market,” CBN said.
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“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 of 50% may be repatriated after 90 days from the date of inflow of the export proceeds.”
According to the CBN, the arrangement is subject to the fulfilment of documentation requirements including “prior approval of the CBN for the repatriation of funds under the “Cash PEN Pooling” transaction,” the apex bank said.
