CBN Cash Pooling Reform: Impact On Foreign Investment And The Oil And Gas Sector In Nigeria

Introduction

On 25 March 2026, the Central Bank of Nigeria (CBN) issued a circular on Removal of Cash Pooling Requirements for International Oil Companies (the “Circular”) removing the restrictions previously imposed on the repatriation of export proceeds by International Oil Companies (IOCs). Under the new framework, IOCs may now repatriate up to 100% of their export earnings immediately, reversing the 2024 “50/50 Rule”, which required a portion of export proceeds to remain in Nigeria for a specified period before repatriation.

In this newsletter, we briefly examine the background to the policy, the recent changes introduced by the CBN, some key documentation required by banks, and the implications for companies operating in Nigeria’s oil and gas sector.

1. What is “Cash Pooling”?

   Cash pooling is a treasury arrangement used by multinational groups to manage the cash balances of their subsidiaries on a consolidated basis. Rather than leaving excess funds idle in separate accounts, the group centralises those funds and deploys them where they are most needed. This improves liquidity management within the group, enhances operational efficiency, and reduces reliance on external financing.

2. The 2024 Policy Shift: The 50/50 Rule

   Before February 2024, IOCs operating in Nigeria could generally repatriate their US dollar export proceeds offshore, subject to local content requirements. However, due to foreign exchange liquidity pressures in early 2024, the CBN introduced restrictions permitting only 50% of export proceeds eligible for repatriation to be transferred immediately (or sold in the local foreign exchange market), while the remaining 50% had to be retained in Nigeria for at least 90 days.

   These measures were designed to increase foreign exchange liquidity and support stability in Nigeria’s foreign exchange market.

3. The 2026 Circular: Restoration of Full Repatriation Rights

   As part of its efforts to further deepen and liberalise the Nigerian foreign exchange market, the CBN, through the Circular, removed the restrictions introduced in 2024. As a result, IOCs may now repatriate up to 100% of their export proceeds immediately upon receipt, subject to compliance with applicable documentation and reporting requirements. The previous 90-day retention requirement has been abolished, allowing companies greater flexibility in managing their export earnings and global treasury operations.

4. Required Documentation
   Although the repatriation restrictions have been removed, Authorised Dealer Banks (ADBs) remain responsible for ensuring that all transactions are properly documented and reported to the CBN.

   Key documents required for processing repatriation requests may include:

1. Evidence of export: Bills of lading, commercial invoices, and other documents evidencing the quantity, quality, and value of the exported crude oil.
2. Clean Certificate of Inspection (CCI): Documentation issued by the relevant inspection authority confirming the quality and volume of the shipment.
3. Evidence of foreign exchange inflow: Bank statements or confirmations showing that the export proceeds have been received into the IOC’s domiciliary account in Nigeria.
4. Cash pooling agreement: The executed agreement between the Nigerian subsidiary and its parent company setting out the terms of the group’s cash pooling arrangement.

   These requirements are intended to promote transparency and ensure regulatory oversight of cross-border fund transfers.

5. Key Market Impact:

   The policy change is expected to have important implications for Nigeria’s oil and gas sector.

1. Foreign Investment

   The removal of the repatriation restrictions is expected to enhance investor confidence by assuring foreign investors and lenders that export proceeds can be accessed and transferred without delay. This may improve the attractiveness of Nigeria as a destination for upstream oil and gas investment, particularly for capital-intensive projects such as deepwater developments.

   In addition, the revised framework simplifies treasury operations for IOCs by eliminating the administrative burden associated with the previous 90-day retention requirement.

2. Domestic Market Considerations

   The policy may also influence foreign exchange flows within the domestic market. While a greater proportion of export proceeds may now be transferred offshore immediately, the CBN appears to have concluded that prevailing market conditions can accommodate the change without undermining foreign exchange liquidity.

   The continued documentation and reporting obligations imposed on ADBs are expected to support regulatory oversight and help maintain market transparency.

Conclusion

The removal of the cash pooling repatriation restrictions marks a shift in Nigeria’s foreign exchange policy for the oil and gas sector. By restoring immediate access to export proceeds, the CBN has provided IOCs with greater flexibility in managing liquidity and participating in global cash pooling arrangements. For Authorised Dealer Banks, the focus shifts from monitoring retention periods to ensuring compliance with documentation and reporting requirements. Overall, the CBN expects the revised framework to strengthen investor confidence and support a more efficient and competitive foreign exchange market.