FX Crisis: CBN stops cash payment of BTA, bars foreign firms from repatriating 100% FX proceeds

Our reporter/ The Central Bank of Nigeria (CBN) on Thursday announced that Personal and Basic Travel Allowances will only be paid through electronic channels and not by cash.

The Director of Trade and Exchange Department at the apex bank, Hassan Mahmud, made this known in a circular dated February 14, 2024.

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

“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),” the circular partly read.

“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.”

The CBN directed all authorised dealers and the general public to note and comply accordingly.

–Bars foreign oil firms from repatriating 100% FX proceeds

Meanwhile, the apex bank has stopped international oil companies from repatriating 100% foreign exchange proceeds to their mother companies overseas at once.

The apex bank said international oil companies can repatriate 50% of their proceeds in the first instance and then the other half after 90 days.

The Director of Trade and Exchange Department at the apex bank, Hassan Mahmud, made this known in a circular dated February 14, 2024.

The CBN said it 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 in a phenomenon described as “cash pooling”.

“This has an impact on liquidity in the domestic foreign exchange market,” the apex bank stated.

“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.”