The Central Bank of Nigeria (CBN) has stopped international oil companies (IOCs) operating in Nigeria from immediately remitting 100% of their forex proceeds to their parent company abroad.

This was disclosed in a circular signed by the apex bank’s Director of Trade and Exchange, Hassan Mahmud where it stated that the practice known as “cash pooling” has an impact on liquidity in the domestic forex market.

According to the new guidelines, IOCs will now be allowed to repatriate only 50% of their proceeds immediately while the other 50% will be repatriated 90 days from the day of inflow.

What the CBN is saying

“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.”

Furthermore, the apex bank introduced rules that will guide “cash pooling” by IOCs going forward. They include approval from the CBN before repatriation of funds under the cash pooling framework, parent entity of IOCs will have to reach an agreement with the CBN before “cash pooling.”

The bank also required IOCs to submit statement of expenditure incurred in the period prior to the cash polling.

Others are- “evidence of the source of foreign exchange inflow.”

“Completion of relevant forex form(s) as required under extant regulations.”
The CBN mandated all banks to inform their customers and comply with the regulation.

More insights

In recent times, the CBN has introduced reforms meant to increase liquidity in the foreign exchange market. While this new policy might achieve its objectives, it risks throwing IOCs into the same pit operators in the manufacturing and aviation industry face with billions of delayed forex forward payments.

In the last interview by the Governor, he explained that the bank has successfully cleared about $2.3 billion of the estimated $7 billion owed. The CBN’s action of clearance comes lates as some notable multinationals have exited the country citing difficulty in operating as a USD dominated entity as one of the reasons for their exit.

Source: https://nairametrics.com/2024/02/15/cbn-stops-international-oil-companies-from-remitting-100-of-forex-proceeds-abroad/

Yemi Cardoso dey vex; he's trying all the tricks in the book to prove that his isn't a patchy-patchy qualification If NNPC had been a serious state-run oil corporation, Nigeria would have sent many IOCs back to their countries and kept all the USD here.

In the other news, I thought that with all these CBN policies flying up and down banks would stop Nigerians who have dorm accounts from accessing their hard-earned USD. I was happy when I went to bank yesterday and withdrew some real cash in USD

This is a very good move by the CBN, anything to retain some foreign exchange in Nigeria is a welcome development.
I even expect the CBN to go a step further and mandate all these IOC to retain at least 10-20% of the foreign earnings in Nigeria.
Although the NNPCL is supposed to retain Nigeria's share of the earning,but we all know most of the funds is paid into the Consolidated fund and shared by FAAC,and some remitted to our foreign reserve.
Il believe the CBN should go the whole hog and make the law,the continued milking of Our resources to cater for some foreigners must stop.
I want to use this opportunity to applaud Nigerians on Nairaland who have continued to use these hard times to proffer great solutions to the Government.
I keep repeating it, Nairaland should be the bastion of intellectual discourse online.
I'm very happy for all those who keep giving suggestions despite the hardship,I read of the person who gave suggestions on a thread some day ago on the BTA some days ago and now Government implemented some of his suggestions.
I will continue to advocate for Nairalanders to keep making useful suggestions to Government,don't ever feel your advice is not seen,I'm sure someone somewhere will read it.
We will not allow the hardship blunt our thoughts,this is time to come together to overcome this hardship with suggestions and ideas.
God bless Nigeria

Guessing work.
FG should work on our export. All this will stop

It's ok .
It means that at everytime,we v some dollars in naira domiciled in Nigeria..


In a nullshell...no fleeing dollar

Everyday, one new directive from Cardoso.

What difference does it make if IOC repatriate their fund in one whole or have to do it in 2 tranches 90 days apart besides creating an illusion of FX liquidity in the country.

Creating another FX backlog like was done with the aviation industry that saw major airlines pulling out of our country.

Policy summersault from one of the "Lagos whiz kids"

Naira on life support...........

Faiththatworks:
This is a very good move by the CBN, anything to retain some foreign exchange in Nigeria is a welcome development.
I even expect the CBN to go a step further and mandate all these IOC to retain at least 10-20% of the foreign earnings in Nigeria.
Although the NNPCL is supposed to retain Nigeria's share of the earning,but we all know most of the funds is paid into the Consolidated fund and shared by FAAC,and some remitted to our foreign reserve.
Il believe the CBN should go the whole hog and make the law,the continued milking of Our resources to cater for some foreigners must stop.
I want to use this opportunity to applaud Nigerians on Nairaland who have continued to use these hard times to proffer great solutions to the Government.
I keep repeating it, Nairaland should be the bastion of intellectual discourse online.
I'm very happy for all those who keep giving suggestions despite the hardship,I read of the person who gave suggestions on a thread some day ago on the BTA some days ago and now Government implemented some of his suggestions.
I will continue to advocate for Nairalanders to keep making useful suggestions to Government,don't ever feel your advice is not seen,I'm sure someone somewhere will read it.
We will not allow the hardship blunt our thoughts,this is time to come together to overcome this hardship with suggestions and ideas.
God bless Nigeria

then foreign investors will leave.

All his policies has failed dollar is 1700, for each policy he makes dollar increases , it will be 2000 by next week

Remit 50% now, remit the balance after 90 days. All na the same they sent back the entire package

All these tortoise brained policies. Trying to use debt to back the Naira into stability. All the one Buhari's government stopped Airlines and Telecom companies from remitting has been paid up now.

Reduce Naira liquidity

This will further depress forex Inflows and further investment in the sector

They will sell cargoes to counterparties via foreign correspondent banks

Nigeria will not see 1 dollar in the transaction

You might as well expropriate IOCs, it's a more coherent policy

They will collect their payment offshore.

Will not solve the problem. Rather push the problem 3 extra months away.

Tinubu is inadvertently inviting the military to take over

Confused people

Make una continue una madness.

The Indian investors are coming with the $14T investment they can't repatriate profits from.

What investor are you inviting with this sort of nonsense policy?

Confused Dullards.

God help this country

Non of his policies have worked the naira keep falling soon it will reach 2000 all because you want your tribeman to be there .

What are these people talking about! Address the antecedent of the naira fall which is that Buhari and his nephews printed trillions of naira illegally which prompted the note to be access. Until Buhari that Son of perdition, is arrested with Emefiele, the Fulani idi@tts that did this havoc with Buhari can never be unraveled

It is well with my dear Country

This is a very bad PR for the country, You just scared away any real investor

So i invest in your country ad you tell me i have to wait for 90 days to pull out the remaining 50% of my profit not for any reason but to boost Liquiduty ... This is MMM

Faiththatworks:
This is a very good move by the CBN, anything to retain some foreign exchange in Nigeria is a welcome development.
I even expect the CBN to go a step further and mandate all these IOC to retain at least 10-20% of the foreign earnings in Nigeria.
Although the NNPCL is supposed to retain Nigeria's share of the earning,but we all know most of the funds is paid into the Consolidated fund and shared by FAAC,and some remitted to our foreign reserve.
Il believe the CBN should go the whole hog and make the law,the continued milking of Our resources to cater for some foreigners must stop.
I want to use this opportunity to applaud Nigerians on Nairaland who have continued to use these hard times to proffer great solutions to the Government.
I keep repeating it, Nairaland should be the bastion of intellectual discourse online.
I'm very happy for all those who keep giving suggestions despite the hardship,I read of the person who gave suggestions on a thread some day ago on the BTA some days ago and now Government implemented some of his suggestions.
I will continue to advocate for Nairalanders to keep making useful suggestions to Government,don't ever feel your advice is not seen,I'm sure someone somewhere will read it.
We will not allow the hardship blunt our thoughts,this is time to come together to overcome this hardship with suggestions and ideas.
God bless Nigeria

This what you guys supposed to have done long before now, but Nigeria with fire brigade approach.


In America and other advance nations, they allow you to operate and possibly making billion of dollars profit in their territory, only tiny of such money would be allowed for you to move away from their territory.

With this, even wen u make so much money, which is personal to you, the Money will not leave the land, hence others would continue benefiting from it, by way of loan or other areas.

TODAY, ELON MUSK IS HAVING HUNDREDTH OF BILLIONS DOLLARS IN AMERICA BANKS, BUT HE CAN ONLY ENJOY IT LARGELY IN AMERICA SOIL. THEY WOULD NEVER ALLOW HIM TO MOVE IT TO SOUTH AFRICA, HIS ORIGIN. EVEN WHEN THEY SERIOUSLY IN NEED OF DOLLARS IN THEIR ECONOMY.

mcbreeze:
Guessing work.
FG should work on our export. All this will stop

How long do you think that should take? We've been working on our exports since God knows when. Or do they just wave their hands and Boom: we start exporting?

Nonybb:
What are these people talking about! Address the antecedent of the naira fall which is that Buhari and his nephews printed trillions of naira illegally which prompted the note to be access. Until Buhari that Son of perdition, is arrested with Emefiele, the Fulani idi@tts that did this havoc with Buhari can never be unraveled

The same Naira that was used in Election sharing .

When This OBIDIENT pple Sayed them no dey give Shi Shi , It would have been better, But the current govt gave out so much that they also had to dollarize the economy after creating a big Religion and Ethnic hatred to win.

History555:
Remit 50% now, remit the balance after 90 days. All na the same they sent back the entire package

This will buy time for internal usage. 3 months no be play.

That 90 days gives green light not necessarily when you can send.

Faiththatworks:
This is a very good move by the CBN, anything to retain some foreign exchange in Nigeria is a welcome development.

There is nothing good about the move!
It will only chase foreign investors away which is bad business for our economy!!!

Ok