CBN Grants IOCs Full Access to Repatriated Export Proceeds in FX Market Reform
The Central Bank of Nigeria (CBN) has announced a significant policy shift, granting international oil companies (IOCs) full and unrestricted access to their repatriated export proceeds. This move effectively removes the cash pooling requirement that was previously imposed on these firms, marking a key step in ongoing reforms aimed at enhancing liquidity and stability in the country's foreign exchange (FX) market.
Details of the New Directive
In a circular dated March 25, 2026, and addressed to all authorised dealer banks, the CBN outlined the new directive. According to the circular, the decision supersedes all previous regulations on cash pooling and takes immediate effect. Under the earlier directive issued in 2024, banks were required to pool 50 per cent of export proceeds on behalf of IOCs, with the remaining 50 per cent held for a mandatory 90-day period before repatriation. The latest policy reversal allows oil companies to access 100 per cent of their export earnings without any restrictions, streamlining the process for repatriating funds.
Implications for the FX Market and Economy
The CBN stated that this reform is part of broader efforts to liberalise the FX market and improve dollar liquidity within the Nigerian economy. By granting IOCs full access to their proceeds, the central bank aims to reduce bottlenecks and encourage smoother financial transactions. This is expected to attract more investment and foster a more stable economic environment. Authorised dealer banks are mandated to ensure proper documentation of all such transactions and must submit monthly reports to the CBN's Trade and Exchange Department to maintain transparency and compliance.
Background and Expected Outcomes
The removal of the cash pooling requirement comes after years of regulatory adjustments aimed at balancing FX market dynamics. The CBN's proactive approach in revising these policies highlights its commitment to addressing liquidity challenges and supporting key sectors like oil and gas. Industry analysts predict that this move will not only enhance operational efficiency for IOCs but also contribute to a more robust and predictable FX market, ultimately benefiting the broader Nigerian economy through increased foreign exchange availability and reduced market volatility.
