Nigeria's Central Bank allows major oil companies to retain all of their foreign exchange proceeds from exports.

The Central Bank of Nigeria has given International Oil Companies the green light to repatriate their export proceeds in full, enabling them to access 100 per cent of their foreign exchange earnings through authorised dealer banks.

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This directive is outlined in a circular issued by the Trade and Exchange Department, which was published on the bank's website on Wednesday, and is signed by the Director, Trade and Exchange Department, Dr Musa Nakorji.

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The move is part of the bank's ongoing efforts to increase liquidity and stability in the foreign exchange market, according to the circular, which explains that the decision marks a significant shift from the bank's earlier policy introduced in 2024.

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That policy allowed authorised dealer banks to pool 50 per cent of repatriated export proceeds on behalf of oil firms, with the balance held for 90 days before repatriation, a practice that has now been discontinued.

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The bank noted that the latest adjustment is intended to further liberalise the market, bringing it in line with prevailing conditions, and stated that International Oil Companies are now granted unfettered access to their repatriated export proceeds.

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The circular explains that IOCs may repatriate 100 per cent of their export proceeds through authorised dealer banks, who will ensure adequate documentation and submit a monthly report to the Director, Trade & Exchange Department.

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The Central Bank of Nigeria has made it clear that the new directive overrides all previous guidelines on cash pooling arrangements for oil companies, stating that this provision supersedes all other circulars issued by the Bank on Cash Pooling.

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The bank has directed all authorised dealer banks to comply with the new framework immediately, effective as of the circular's issuance, and warned that all Authorised Dealer Banks are to note and be guided accordingly.

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In 2024, the CBN introduced measures affecting international oil companies operating in Nigeria, limiting their ability to immediately remit 100 per cent of forex proceeds to their parent companies abroad, instead requiring them to repatriate 50 per cent of their proceeds immediately.

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The remaining 50 per cent was to be repatriated 90 days after the inflow, under the rules implemented by the CBN, which also governed cash pooling by IOCs and required prior approval from the CBN for repatriation under the cash pooling framework.

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International Oil Companies were also required to provide detailed statements of expenditure incurred before pooling, and were permitted to pool 50 per cent of their export proceeds while using the remaining funds to settle financial obligations within Nigeria over 90 days.

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Additionally, IOCs were allowed to sell the 50 per cent balance of their repatriated proceeds to authorised foreign exchange dealers, but the new circular is expected to ease the constraints faced by oil firms in accessing their foreign exchange earnings.