The Central Bank of Nigeria (CBN) has issued an order barring international oil companies (IOCs) operating in Nigeria from immediately remitting 100 per cent of their forex proceeds to their parent companies abroad.
In a circular signed by the Director of Trade and Exchange, Hassan Mahmud, the CBN stated that the practice known as “cash polling” has an impact on liquidity in the domestic forex market.
Details of the new guidelines, as contained in the circular, show that IOCs will now be allowed to repatriate only 50 per cent of their proceeds immediately while the other 50 per cent will be repatriated 90 days from the day of inflow.
“The Central Bank has observed that proceeds of crude oil exports by International Oil Companies (IOCs) operating in Nigeria are transferred offshore to fund parent accounts of the IOCs (otherwise referred to as cash polling). This has an impact on liquidity in the domestic foreign exchange market.
“In line with the ongoing reforms in the foreign exchange market, it has become necessary to take measures to address this trend. Consequently, the CBN hereby directs as follows;
“Banks are allowed to pool cash on behalf of IOCS, subject to a maximum of 50% of the repatriated export proceeds in the first instance
“The Balance 50% may be repatriated after 90 days from the date of inflow of export proceeds,” it added.
