The Central Bank of Nigeria (CBN) has reviewed its directive on the repatriation of export proceeds by international oil companies (IOCs).
In a circular on May 6, CBN said IOCs can repatriate 50
percent of their export proceeds immediately or when required, while the
remaining 50 percent can be used to settle financial obligations in Nigeria.
The circular was signed by Hassan Mahmud, director, trade
and exchange department.
On February 15, the apex bank placed a limit on transfer of
proceeds from crude exports by IOCs to offshore parent company accounts.
CBN said the transfer of funds by the IOCs has an impact on
liquidity in the domestic foreign exchange market.
The financial regulator directed banks to only transfer 50
percent of repatriated export proceeds, on behalf of the IOCs, to their parent
company offshore accounts — with the remaining 50 percent repatriated after 90
days.
However, CBN has clarified that within the 90-day period, IOCs
can use the balance to settle financial obligations such as petroleum profit
tax, royalty and domestic contractor invoices.
“The initial 50% of
the repatriated proceeds can be pooled immediately or as at when required.
Banks may submit the request for cash pooling ahead of the expected date of
receipt, supported by the required documentations, for approval by the Central
Bank of Nigeria,” the apex bank said.
“The 50% balance of the repatriated export proceeds could be
used to settle financial obligations in Nigeria, whenever required, during the
prescribed 90-day period.”
CBN said the IOCs can also utilise the balance for cash
calls, domestic loan principal and interest payments, transaction taxes
(including Nigerian Content Development NCD) Levy), education tax, and forex
sale at the Nigerian Foreign Exchange Market.
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