CBN grants oil firms full forex repatriation to boost investment

The Central Bank of Nigeria (CBN) has approved the full repatriation of export proceeds for International Oil Companies (IOCs), allowing them to access 100 per cent of their foreign exchange earnings through authorised dealer banks. The move marks a major shift in Nigeria’s foreign exchange policy and is seen as part of broader reforms to strengthen market liquidity and attract investment.

The directive, contained in a circular issued by the CBN’s Trade and Exchange Department and signed by Director Dr. Musa Nakorji, reverses an earlier restriction introduced in 2024. Under the previous policy, IOCs could repatriate only 50 per cent of their export proceeds upfront, with the remaining half held within the domestic banking system for 90 days before repatriation.

The apex bank said the new measure is aimed at “further liberalising and deepening the market in line with current market realities,” adding, “The IOCs may repatriate 100% of their export proceeds through the Authorised Dealer Banks (ADBs), who shall ensure adequate documentation and submit a monthly report to the Director, Trade & Exchange Department.”

The circular also specifies how repatriated funds can be utilised domestically. Permissible channels include payments for petroleum profit tax, royalties, domestic contractors, cash calls, domestic loan servicing, transaction tax, education tax, and foreign exchange sales in the Nigerian FX market.

Observers say the policy reversal sends a strong signal to investors that Nigeria is committed to creating a more conducive environment for hydrocarbon sector growth. By easing restrictions on capital flows, the CBN aims to incentivise IOCs to sustain and expand their investments, while also boosting market confidence and encouraging foreign inflows.

“The move reflects the central bank’s determination to align policy with market realities and ensure Nigeria remains competitive in attracting global energy investors,” said an industry expert.
Market analysts also suggest that full repatriation could improve liquidity in the FX market and help stabilise the naira, which has faced volatility in recent years. With the liberalisation, IOCs are expected to have greater flexibility in managing their operations and financial obligations, reinforcing Nigeria’s position as a key investment destination in Africa’s oil and gas sector.