The Central Bank of Nigeria (CBN) has said that International Oil Companies (IOC) can use 50 per cent of their foreign exchange proceeds for settlement of financial obligations.
The obligations include petroleum tax, royalty, domestic contractor invoices, cash calls, domestic loan payments, interest payments, education tax, transaction tax, and forex sales in the Nigerian foreign exchange market.
The CBN made the clarification in a circular in response to queries raised by banks and other stakeholders regarding the previous circular in February, concerning cash pooling of repatriated oil and gas export proceeds by IOCs.
In the circular signed by the Director of the Trade and Exchange Department Dr Hassan Mahmud on Tuesday, the CBN said the initial 50% of the repatriated proceeds can be pooled immediately or as when required and that banks may submit the request for cash pooling ahead of the expected date of receipt, supported by the required documentation, for approval by the CBN.
The CBN further stated that banks can forward cash pooling requests before the actual date of receipt, which must be backed by the necessary documentation for CBN’s approval.
It said the remaining 50 per cent of the repatriated export proceeds can be allocated to meet financial obligations within Nigeria, as and when required, within the stipulated 90-day period, adding that the directive aims to streamline the process for the repatriation and subsequent utilisation of export proceeds.
