BREAKING: CBN Stops Int’l Oil Firms From Remitting 100% Forex Proceeds Abroad

The Central Bank of Nigeria (CBN) has issued a notice, dated February 14, 2024, informing international oil companies that they are no longer permitted to repatriate 100% of their foreign exchange proceeds to their parent companies abroad.

The apex bank’s directive was contained in a communique signed and released by its Director of Trade and Exchange Department, Hassan Mahmud.

The latest development came a week after the House of Representatives vowed to probe banks and financial institutions in the country for failing to comply with Central Bank of Nigeria (CBN) regulations on Net Open Position Limits for foreign exchange.

Moving a motion of urgent public importance for the probe last week, Babajimi Johnson (APC, Lagos) explained that Sections 8 (4) and (5) of the CBN Act require the CBN Governor to brief the relevant Committees of the National Assembly during semi-annual hearings and to provide periodic reports on the economy’s performance to the Assembly.

He also voiced alarm over the dollar’s consistent increase relative to the naira, noting that the dollar reached a peak of roughly N1,520 last week.

He claimed that a variety of market forces and specific government-adopted economic policies, such as the dollar’s liberalization, are to blame for this phenomenal development.

Instead of lending to their customers to sell when the currency rate is high, the senator claimed that commercial banks and other financial institutions in Nigeria typically retain a sizable portion of the foreign exchange they acquire through purchases, borrowings, or allocations from the CBN.