CBN Lifts Oil Firms’ Restrictions on Repatriation of Foreign Exchange Profits

The Central Bank of Nigeria (CBN) has eased the first conditions preventing foreign oil companies doing business in Nigeria from repatriating their forex earnings.

The apex bank announced that oil companies can now use 50% of the remaining repatriated export revenues for debt obligations in a circular dated May 6, 2024, signed by Hassan Mahmud, Director, Trade and Exchange Department.

The top bank prohibited foreign oil businesses in February from immediately returning 100% of their foreign exchange earnings to their parent corporations abroad.

According to the top bank, foreign oil companies could first repatriate half of their earnings and then the remaining half after ninety days.

“Following the recent enquiries by banks and other stakeholders on our circular referenced TED/FEM/PUB/FPC/001/004, in respect of Cash Pooling requests by banks on behalf of IOCs, we provide further clarifications as follows,” the CBN stated in its new order.

The first half of the returned earnings might be pooled right away or as needed. The apex bank noted that banks may submit requests for cash pooling before of the anticipated date of receipt, accompanied by the necessary documentation, for approval by the Central Bank of Nigeria.

The remaining 50% of the export revenues could be utilised to pay off debts in Nigeria within the allotted 90 days, as needed.

From the remaining 50%, the CBN noted, petroleum profit tax, royalty, domestic contractor invoices, cash call, principle and interest payment on domestic loans, transaction taxes, education tax, and FX sales at the Nigerian Foreign Exchange Market are eligible for settlement.