The Central Bank of Nigeria (CBN) has approved the full repatriation of foreign exchange earnings for International Oil Companies (IOCs), a move that allows them to access 100 percent of their export proceeds through authorised dealer banks. The development, announced in a circular by the CBN’s Trade and Exchange Department, marks a significant shift in the apex bank’s approach to managing foreign exchange flows in Nigeria.
Previously, under a 2024 policy, IOCs were only allowed to immediately repatriate 50 percent of their export proceeds, while the remaining half was held for 90 days before being repatriated. The cash pooling framework also required detailed documentation and prior CBN approval, creating delays for oil companies seeking to access their foreign exchange revenues.
The new directive, signed by Dr. Musa Nakorji, Director of the Trade and Exchange Department, is aimed at further liberalising the forex market and aligning with current market realities. According to the circular, “IOCs are hereby granted unfettered access to their repatriated export proceeds,” and authorised dealer banks must ensure proper documentation and submit monthly reports to the CBN.
The CBN emphasized that this reform supersedes all previous circulars on cash pooling arrangements, instructing all authorised dealer banks to implement the new framework immediately. Analysts note that the move could improve liquidity in the forex market, ease constraints for oil firms, and potentially attract further investment in Nigeria’s oil and gas sector.
Industry observers see the decision as a step toward stabilizing Nigeria’s foreign exchange market while reducing bottlenecks for exporters. By giving IOCs full access to their foreign earnings, the CBN hopes to foster a more efficient, transparent, and investor-friendly environment, signaling continued reforms in the country’s economic policy.
source: punch