The Central Bank of Nigeria (CBN) has announced that it has removed the cash pooling requirement for international oil firms (IOCs), allowing them unfettered access to their export revenues.

Cash pooling is a financial arrangement in which a firm (or regulator) centralises cash from various accounts into a single location to better manage it.

According to a circular issued on Wednesday, the new policy overrides previous criteria announced in 2024, which required banks to pool 50% of repatriated export revenues on behalf of IOCs, with the remaining held for 90 days before repatriation.

However, the amended system now allows oil companies to access and repatriate 100% of their export revenues.

The directive, signed by Musa Nakorji, director of the trade and exchange department, takes immediate effect.

“IOCs are hereby granted unfettered access to their repatriated export proceeds. The IOCs may repatriate 100 percent of their export proceeds through the ADBs,” the circular reads.

The apex bank stated that the decision is intended to further open up the foreign exchange (FX) market in alignment with current reality.

The CBN directed authorised dealer banks (ADBs) to properly document such transactions and submit monthly reports to its trade and exchange department.

The bank stated that the instruction supersedes all earlier circulars pertaining to cash pooling.

The policy is part of the CBN’s broader attempts to strengthen the Nigerian FX market and improve transaction efficiency.

On February 14, 2024, the CBN limited the transfer of crude export earnings by IOCs to offshore parent company accounts.

The apex bank said the transfer of export proceeds by IOCs has an influence on liquidity in the domestic foreign exchange market.

Two months later, the regulator said IOCs could sell 50 percent of their repatriated export proceeds in the Nigerian Foreign Exchange Market.