Nigeria Liberalises Forex Market as CBN Ends Repatriation Limits for Oil Firms

Nigeria Liberalises Forex Market as CBN Ends Repatriation Limits for Oil Firms

The Central Bank of Nigeria (CBN) has approved the full repatriation of export proceeds by International Oil Companies (IOCs), granting them unrestricted access to 100 per cent of their foreign exchange earnings through authorised dealer banks.

The directive, issued via a circular by the apex bank’s Trade and Exchange Department and signed by its Director, Musa Nakorji, marks a significant step in Nigeria’s ongoing foreign exchange (FX) market liberalisation.

According to the CBN, the policy forms part of broader reforms aimed at boosting FX liquidity, enhancing market transparency, and stabilising the naira amid persistent volatility.

The new framework replaces the 2024 arrangement, which allowed authorised dealer banks to pool 50 per cent of repatriated export proceeds on behalf of oil companies, while the remaining 50 per cent was held for 90 days before it could be accessed or repatriated.

Under the updated policy, IOCs now have unfettered access to their forex inflows, enabling them to repatriate the full value of their export proceeds without delays. Authorised dealer banks have been directed to ensure proper documentation and submit monthly compliance reports to the CBN.

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The apex bank stated that the decision overrides all previous guidelines on cash pooling and phased repatriation, effectively dismantling restrictions introduced in 2024 as part of earlier FX control measures.

The move is widely seen as a response to sustained pressure from investors and multinational oil firms seeking greater flexibility in managing their earnings. Analysts note that previous restrictions had created liquidity bottlenecks and discouraged foreign investment inflows into Nigeria’s oil and gas sector.

By restoring full access to export proceeds, the CBN aims to improve investor confidence, encourage capital inflows, and deepen participation in Nigeria’s FX market. The policy is also expected to ease operational constraints for IOCs, many of which rely on timely access to foreign exchange for offshore obligations and reinvestment decisions.

The development aligns with a series of recent reforms by the CBN to transition toward a more market-driven exchange rate system, reduce FX backlogs, and unify multiple exchange windows. These reforms have included clearing outstanding FX obligations, tightening documentation requirements, and enhancing transparency in FX transactions.

Economic experts say the decision could help attract fresh investment into Nigeria’s energy sector, particularly at a time when the country is seeking to boost crude oil production and maximise foreign exchange earnings. However, they caution that sustained impact will depend on broader macroeconomic stability, consistent policy implementation, and improved oil output levels.

In addition, stakeholders emphasise that strengthening domestic refining capacity—particularly through facilities like the Nigerian National Petroleum Company Limited refineries and private sector investments—remains critical to reducing long-term FX demand linked to fuel imports.

Overall, the policy signals a clear shift by the CBN toward greater FX liberalisation, with the potential to reshape how multinational oil companies operate within Nigeria’s financial system while supporting efforts to stabilise the economy.

Nigeria Liberalises Forex Market as CBN Ends Repatriation Limits for Oil Firms