CBN Grants International Oil Firms Unrestricted Access to Forex Earnings

The Central Bank of Nigeria (CBN) has dismantled restrictions on the use of export proceeds by International Oil Companies (IOCs), allowing them full and immediate access to their foreign exchange earnings in a significant shift aimed at deepening market liquidity.

The move, announced in a circular on Wednesday, March 25, effectively abolishes the controversial cash pooling framework introduced in 2024, which had required banks to aggregate a portion of oil firms’ export revenues under tight controls.

Under the previous arrangement, authorised dealer banks retained 50 per cent of repatriated proceeds on behalf of IOCs, while the remaining balance was held for up to 90 days before companies could access or transfer the funds.

However, the new directive removes those limits, granting oil firms unrestricted control over their earnings.

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“IOCs are hereby granted unfettered access to their repatriated export proceeds. The IOCs may repatriate 100 percent of their export proceeds through the ADBs,” the circular reads.

The directive, signed by Director of the Trade and Exchange Department, Musa Nakorji, takes immediate effect and overrides all prior guidelines on cash pooling.

The circular reads: “As part of the reforms aimed at creating more liquidity and stability in the Nigerian Foreign Exchange Market, the Bank issued two circulars in 2024, allowing Authorised Dealer Banks (ADBs) to cash pool 50% of repatriated export proceeds on behalf of International Oil Companies (IOCs) with the remaining 50% retained for 90 days before repatriation.

“However, to further liberalise and deepen the market in line with current market realities, IOCs are hereby granted unfettered access to their repatriated export proceeds.

“The IOCs may repatriate 100% of their export proceeds through the ADBs, who shall ensure adequate documentation and submit a monthly report to the Director, Trade & Exchange Department.

“Please note that this provision supersedes all other circulars issued by the Bank on Cash Pooling. All Authorised Dealer Banks are to note and be guided accordingly, as this directive takes immediate effect.”