The Central Bank of Nigeria (CBN) has announced a relaxation of its previous restrictions on the repatriation of foreign exchange proceeds by international oil companies (IOCs) operating in the country.

In a circular dated May 6, 2024, signed by Hassan Mahmud, the Director of the Trade and Exchange Department, the CBN disclosed that oil firms are now permitted to utilize 50% of the balance from repatriated export proceeds for financial obligations.

This amendment comes after the CBN’s earlier directive in February, which prohibited IOCs from repatriating 100% of their foreign exchange proceeds to their parent companies overseas at once.

The initial directive mandated that IOCs could only repatriate 50% of their proceeds initially, with the remaining half available for repatriation after a 90-day period.

However, in its new directive, the CBN said, “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 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.”

Eligible uses for the balance 50% include petroleum profit tax, royalty payments, domestic contractor invoices, cash calls, domestic loan principal and interest payments, transaction taxes, education taxes, and forex sales at the Nigerian Foreign Exchange Market.