CBN, NNPCL To Strengthen Oil Revenue Collection, Guarantee Seamless Commercial Operation

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The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, and the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso have noted great value in providing the NNPCL with an improved platform for managing its cash-holding obligor limits in commercial banks set by the Board of Directors

This came after a review by both the NNPCL and the CBN of the decision of the NNPCL to domicile a significant portion of its revenues and other banking services with the CBN.

The CBN has provided enhanced digital platforms for all transactions and has established specific limits to manage NNPCL transactions.

Both parties have also committed to further strengthening the collaboration to ensure seamless operations of the commercial NNPC limited and noted that NNPCL continues to have banking transactions with commercial banks as required.

For transparency and accountability, President Bola Tinubu had ordered the CBN to take over the responsibility for crude oil sales from NNPCL and under the new arrangement, NNPC will submit receipts for crude oil sales to CBN for vetting and documentation.

NNPCL over the years has maintained sole control over crude oil sales, only rendering accounts to the Federal Government. This arrangement is no longer tenable amid declining oil revenue following lower oil production arising from crude theft and other sharp practices.

The new arrangement will block any gap in the crude oil sales and declared receipts.

The CBN Governor, last week stated that the collaboration with the Ministry of Finance and the NNPCL is to ensure that all foreign inflows are returned to the Central Bank.

“This coordinated effort will greatly enhance the Bank’s foreign exchange flows and contribute to the accretion of reserves,” he said.

Cardoso stated “The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN.

“This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing arbitrage opportunities.

“The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.”

“We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years.

“Upholding the integrity of financial markets is crucial for building confidence. With the completion of an independent forensic review, we are addressing the backlog of valid FX transactions, and we remain steadfast in our commitment to decisively address any infractions and abuses,” he added.