The Central Bank of Nigeria (CBN) has issued further details on the circular pertaining to the cash pooling of repatriated oil and gas export proceeds by international oil companies (IOCs).
In response to observations raised by banks and other stakeholders following the February circular, the apex bank outlined specific expenses that can be covered from 50 percent of the repatriated funds. These expenses 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 had disclosed that the IOCs were transfering crude oil export proceeds offshore for cash pooling, a practice it said had a direct impact on the domestic foreign exchange market liquidity.
To mitigate the negative effects and as part of ongoing forex market reforms, the CBN introduced specific measures. The new guidelines allows banks to pool cash for IOCs. The IOCs are…
Source: Leadership Newspaper
