The Central Bank of Nigeria (CBN) has reversed its cash pooling requirement for International Oil Companies (IOCs), announcing that IOCs can now repatriate 100 percent of their export proceeds. The policy shift, outlined in a circular signed by Dr. Musa Nakorji, Director of the Trade Department, aims to provide IOCs with unfettered access to their funds.
Under the previous 2024 regulation, Authorized Dealer Banks (ADBs) were permitted to pool 50 percent of repatriated export proceeds for up to 90 days before forwarding the funds to the IOCs. The new directive eliminates this retention, mandating that ADBs facilitate full and immediate repatriation while ensuring proper documentation and submitting monthly compliance reports to the CBN.
The reversal coincides with a significant surge in global crude oil prices, which have approached $100 per barrel amid geopolitical tensions in the Middle East. This price increase has amplified the volume of foreign currency earnings from Nigeria’s oil exports, making the repatriation of these proceeds a critical issue for both the IOCs and national foreign exchange (FX) liquidity.
By allowing the complete repatriation of export earnings, the CBN’s move is expected to enhance investor confidence and improve the operating environment for foreign oil companies in Nigeria. It also streamlines foreign exchange management by removing the mandatory retention period, potentially increasing the flow of dollars into the official market. The central bank’s decision underscores a tactical response to prevailing market conditions, balancing regulatory oversight with the need to attract and retain foreign investment in the crucial oil and gas sector.
