Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, revealed that there was resistance from stakeholders in the oil and gas industry following the CBN’s recent directive on foreign exchange proceeds utilization by sector firms.
Speaking at the BusinessDay CEO Forum themed ‘Leadership in Tough Economic Times’, Cardoso discussed the ongoing dialogue and adjustments made to address industry concerns.
“In the initial stages, we encountered some resistance when we first introduced this directive,” Cardoso stated.
“However, through dialogue and addressing key concerns, we have been able to reassure many stakeholders, and progress is being made.”
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The directive, outlined in a circular dated May 6, 2024, allows oil firms to allocate 50% of repatriated export proceeds towards financial obligations within a prescribed 90-day period.
This adjustment aims to manage liquidity in the domestic forex market effectively.
Under the directive, eligible uses for the remaining 50% include settling petroleum profit tax, royalties, domestic contractor invoices, and other specified financial obligations in Nigeria.
Earlier, the CBN restricted international oil companies from immediately repatriating 100% of their forex proceeds overseas, citing the impact on domestic forex liquidity.
The CBN continues to engage stakeholders to ensure a balanced approach to managing forex flows in the sector.
