The Central Bank of Nigeria (CBN) announced on Friday that international oil companies (IOCs) can sell 50% of their repatriated export proceeds in the Nigerian Foreign Exchange Market.
This follows a previous directive issued on February 14, which limited the transfer of crude export proceeds to offshore parent company accounts, to improve liquidity in the domestic foreign exchange market.
In a circular signed by W.J. Kanya, Director of Trade and Exchange Department, the CBN stated that banks could only transfer 50% of repatriated export proceeds to offshore accounts, with the remaining 50% to be repatriated after 90 days. However, on May 6, the CBN revised this directive.
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Now, IOCs are allowed to immediately repatriate 50% of their export proceeds or use it as needed, while the remaining 50% must be used to settle financial obligations in Nigeria.
The CBN’s move aims to balance the needs of IOCs with maintaining liquidity in the domestic market.
By permitting the sale of retained proceeds in Nigeria, the CBN hopes to boost liquidity and support economic growth.
In response to queries regarding the directive, the CBN clarified that the 50% balance of repatriated proceeds could be sold to Authorized Dealers or eligible foreign exchange users with approved transactions.
If an IOC has no financial obligations to settle during or after the 90 days, the remaining 50% may also be sold.
The CBN specified that eligible financial obligations include cash calls, domestic loan principal and interest payments, transaction taxes (such as the Nigerian Content Development Levy), and education tax.
