Nigeria Lifts Export Earnings Restriction for Oil Companies to Boost FX Market

Nigeria’s central bank has ended the requirement that international oil companies hold part of their export earnings locally, allowing full repatriation of proceeds. The move aims to boost liquidity, restore cash-flow flexibility for oil firms, and further liberalise the foreign exchange market, though immediate increases in dollar supply are not expected.

Nigeria’s central bank has lifted a requirement that previously forced international oil companies to hold a portion of their export earnings locally, allowing them to repatriate all proceeds through authorised banks. The move, announced in a circular dated March 25, ends the “cash pooling” rule that allowed only half of oil export revenues to be transferred immediately, with the remainder held for up to 90 days. Under the new directive, oil firms can access their full export earnings subject to documentation and monthly reporting.
The reform is part of ongoing efforts to liberalise and deepen Nigeria’s foreign exchange market, aiming to stabilise the naira and attract investment. For international oil companies, the change restores greater control over cash-flow management, enabling them to decide when and how to deploy export revenues without mandatory holding periods. Industry executives noted that freer access to dollar earnings improves treasury efficiency and slightly reduces financial risk in the upstream sector, where confidence in capital mobility is crucial.
The policy reversal comes after a restriction introduced in February 2024 amid acute dollar shortages, when the central bank capped immediate oil export transfers at 50% to boost local dollar liquidity. That earlier measure was part of broader reforms addressing foreign exchange strain from low oil prices and the COVID-19 economic shock.
In addition to lifting the cash-holding requirement, the central bank has raised open-market rates to attract investors and removed caps on foreign-exchange spreads in the interbank market, continuing its gradual unwinding of controls imposed during periods of financial stress. The move is expected to improve liquidity and confidence in Nigeria’s foreign exchange market, though an immediate surge in dollar supply is not anticipated.