The Central Bank of Nigeria (CBN) has cancelled the cash pooling requirement for International Oil Companies (IOCs) which now authorizes them to repatriate 100 per cent of their export proceeds through Authorised Dealer Banks (ADBs)
Prior to the new regulatory measure, the apex bank, as part of its reforms aimed at improving liquidity in the Nigerian foreign exchange (FX) market, had issued two circulars in 2024 permitting ADBs to pool 50 per cent of repatriated export proceeds on behalf of IOCs, while the remaining 50 per cent was to be retained for 90 days before repatriation.
In a new circular signed by the apex bank’s Director, Trade and Exchange Department, Dr. Musa Nakorji, the CBN stated that in order to further liberalise and deepen the market in line with current realities, IOCs can now wholly access their repatriated export proceeds.
The circular stated: “Accordingly, IOCs may repatriate 100 per cent of their export proceeds through ADBs, which are required to ensure proper documentation and submit monthly reports to the Director, Trade and Exchange Department.
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“This provision supersedes all previous circulars issued by the Bank on cash pooling.
“All Authorised Dealer Banks are advised to note and comply accordingly, as this directive takes immediate effect”, the apex bank added.
Industry experts believe that the latest policy measure of the CBN has the potential of attracting new foreign investors to the hydrocarbon resources industry with the attendant implications for improved crude oil production capacity to meet local demand and OPEC quota targets, if complemented by supportive fiscal policy measures.
