Yemisi Izuora
The Central Bank of Nigeria (CBN) has removed a requirement that forced international oil companies to temporarily retain part of their export earnings, allowing them to repatriate all proceeds in a move aimed at improving liquidity and confidence in the foreign exchange market.
In a circular dated March 25, the Apex Bank said it had scrapped earlier “cash pooling” requirements that allowed authorised dealer banks to transfer only half of oil export proceeds immediately, with the balance held for up to 90 days.
Under the new directive, oil companies may repatriate all export earnings through authorised banks, subject to documentation and monthly reporting, with immediate effect.
The move signals further liberalisation of Nigeria’s foreign exchange regime for oil exporters, a key source of dollar inflows, though it is unlikely to produce an immediate jump in supply.
The Bank said the move was part of ongoing reforms to “further liberalise and deepen the market in line with current market realities,” as it works to stabilise the naira currency and attract investment.
For international oil companies, the reform restores greater control over cash-flow management, allowing firms to decide when and how to deploy export earnings without mandatory holding periods.
Industry executives say freer access to dollar revenues improves treasury efficiency and marginally lowers financial risk in Nigeria’s upstream sector, where confidence over capital mobility remains key.
The change reverses a restriction imposed in February 2024 amid acute dollar shortages that pushed the naira to record lows. At that time, the central bank capped immediate transfers of oil export proceeds at 50%, with the remainder held locally for 90 days in a bid to shore up dollar liquidity.
That earlier measure formed part of a broader package of reforms following years of foreign exchange strain linked to low oil prices and the COVID-19 shock.
Since then, the central bank has also raised open-market rates to attract investors and scrapped caps on foreign-exchange spreads in the interbank market as it unwinds controls introduced during periods of stress.