Nigeria’s central bank has eliminated a regulation that forced international oil companies to retain a portion of their export earnings temporarily, enabling them to transfer all proceeds abroad. The move aims to increase liquidity and restore confidence in the foreign exchange market.
The decision overturns a February 2024 restriction imposed during severe dollar shortages, when the naira dropped to record lows. At that time, the central bank allowed only 50% of export revenues to be repatriated immediately, keeping the remainder in-country for 90 days to support liquidity.
In a circular issued on March 25, the central bank announced it had removed the “cash pooling” rule, which had previously limited immediate transfers of oil export proceeds and required holding the balance for up to three months.
With the new guidance, oil companies can now repatriate the full amount of their export earnings through authorised banks, provided they submit the necessary documentation and monthly reports, effective immediately.
This development reflects continued liberalisation of Nigeria’s foreign exchange policies for oil exporters, a major source of dollar inflows, although experts caution that it may not immediately increase supply.
The central bank described the reform as part of broader efforts to “further liberalise and deepen the market in line with current realities,” seeking to stabilise the naira and attract investment.
For international oil companies, the policy change restores greater flexibility over cash management, allowing them to decide when and how to deploy export revenues without enforced holding periods.
Executives in the sector say that easier access to dollar earnings will enhance treasury efficiency and slightly lower financial risk in Nigeria’s upstream oil industry, where confidence in capital mobility remains essential.