Nigeria Allows Full Repatriation of Oil Export Earnings

The central bank of Nigeria has officially removed restrictions that previously required international oil companies to retain a portion of their export earnings within the country. This policy shift allows these firms to repatriate 100% of their proceeds immediately, a move designed to boost liquidity and restore confidence in the local foreign exchange market. In a circular dated March 25, the central bank confirmed it had scrapped earlier cash pooling requirements that allowed authorized dealer banks to transfer only half of oil export proceeds immediately, with the balance held for up to 90 days. Under the new directive, oil companies may repatriate all export earnings through authorized banks, subject to documentation and monthly reporting, with immediate effect.

The move signals further liberalization of the foreign exchange regime for exporters of Crude Oil, a key source of dollar inflows, though it is unlikely to produce an immediate jump in supply. The central bank described the policy change as a component of broader efforts to align the financial system with current economic conditions and attract investment.

The move was part of ongoing reforms to further liberalise and deepen the market in line with current market realities.

For international oil companies, the reform restores greater control over cash-flow management, allowing firms to decide when and how to deploy export earnings without mandatory holding periods. Industry executives say freer access to dollar revenues improves treasury efficiency and marginally lowers financial risk in the upstream sector, where confidence over capital mobility remains key. The change reverses a restriction imposed in February 2024 amid acute dollar shortages that pushed the naira to record lows. At that time, the central bank capped immediate transfers of oil export proceeds at 50%, with the remainder held locally for 90 days in a bid to shore up dollar liquidity. Since then, the central bank has also raised open-market rates to attract investors and scrapped caps on foreign-exchange spreads in the interbank market as it unwinds controls introduced during periods of stress.