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CBN Announces New Policies On Travel Allowances And Foreign Oil Firms

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The Central Bank of Nigeria, CBN, in a bid to mitigate the foreign exchange crisis in Nigeria, has announced that Personal and Basic Travel Allowances will now only be paid via electronic channels.

The apex bank’s Director of Trade and Exchange Department at the apex bank, Hassan Mahmud, gave the directive in a circular dated February 14, 2024. All authorized dealers and the general public are to note and comply accordingly.

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The circular titled, ‘Allowable Channels For Payout Of Personal Travel Allowance (PTA) And Business Travel Allowance (BTA)’ read;

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“Memorandum 8 of the Foreign Exchange manual and the circular with reference FMD/DIR/CIR/GEN/08/003 dated February 20, 2017, stipulate the eligibility criteria for accessing Personal and Business Travel allowances (PTA/BTA).

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“In line with the Bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, All Authorised Dealer Banks shall henceforth effect payout of PTA/BTA through electronic channels only, including debit or credit cards.”

 

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Foreign oil firms barred by CBN from repatriating 100% of its FX revenue

The Central Bank of Nigeria, CBN, has also barred International Oil Companies (IOCs) from repatriating all their foreign exchange earnings to their parent companies abroad.

Commencing immediately, the policy restricts foreign oil firms from repatriating 50 percent of their proceeds in the first instance and the other half after 90 days.

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In a circular signed by CBN’s Director of Trade and Exchange, Hassan Mahmud, it was stated that IOCs must have easy access to their export proceeds to fulfill their offshore obligations.

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The apex also noted that it would hold on to the policy as long as it has the least possible detrimental effect on the liquidity of the Nigerian foreign exchange market.

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The circular reads;

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“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.

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“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.”

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