Nigeria’s central bank has removed a rule that required international oil companies to temporarily hold part of their export earnings, allowing firms to repatriate all proceeds immediately, Reuters reported.
The move is aimed at boosting liquidity and restoring confidence in the country’s foreign exchange market.
In a circular dated March 25, the central bank said it had scrapped the earlier “cash pooling” requirement, which had permitted authorised dealer banks to transfer only half of oil export proceeds immediately, while the remainder was held for up to 90 days.
Under the new directive, oil companies can now repatriate all export earnings through authorised banks, provided they comply with documentation and monthly reporting requirements, effective immediately.
The reform signals further liberalisation of Nigeria’s foreign exchange regime for oil exporters, a major source of dollar inflows, though it is not expected to trigger an immediate surge in supply.
The central bank described the measure as part of ongoing reforms “to further liberalise and deepen the market in line with current market realities,” aiming to stabilise the naira and attract investment.
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For international oil companies, the change restores greater control over cash-flow management, allowing them to decide when and how to use export earnings without mandatory holding periods.
Industry executives say that freer access to dollar revenues enhances treasury efficiency and slightly reduces financial risk in Nigeria’s upstream sector, where confidence in capital mobility remains crucial.
The update reverses a restriction imposed in February 2024, during a period of acute dollar shortages that pushed the naira to record lows.
At that time, the central bank limited immediate transfers of oil export proceeds to 50%, with the remaining half held locally for 90 days to bolster dollar liquidity.
That earlier measure was part of a broader package of reforms introduced after years of foreign exchange strain caused by low oil prices and the COVID-19 shock.
Since then, the central bank has also raised open-market rates to attract investors and removed caps on foreign exchange spreads in the interbank market, gradually rolling back controls put in place during periods of financial stress.
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Image Credit: Reuters
