Cash Pooling: CBN Issues Update on IOCs Fund Repatriation Limit
International oil companies (IOCs) have been permitted to use the balance of 50% of their export proceeds to settle local obligation in Nigeria within the specified period, the Central Bank of Nigeria (CBN) said in a new release.
CBN made the clarification in a circular dated May 6, 2024, which was signed by CBN Director, Trade and Exchange Department, Dr. Hassan Mahmud, and addressed to all authorised dealer banks.
It stated that the 50 per cent balance of the repatriated export proceeds could be used to settle financial obligations in the country, whenever required, during the prescribed 90-day period.
The apex bank explained that the initial 50 per cent of the repatriated proceeds could be pooled immediately or as when required.
The circular followed recent enquiries by banks and other stakeholders on its circular in respect of Cash Pooling requests by banks on behalf of IOCs.
CBN stated that banks may submit the request for cash pooling ahead of the expected date of receipt, supported by the required documents, for approval by the central bank.
The authority explained that expenses on petroleum profit tax, royalty, domestic contractor invoices, cash call, and domestic loan – principal and interest payment – were eligible for settlement from the balance 50 per cent.
Others include transaction taxes (Including Nigerian Content Development (NCD) Levy), education tax, and forex sales at the Nigerian Foreign Exchange Market.
