The Central Bank of Nigeria (the CBN) in a circular dated 14 February 2024, issued directives to all Authorised Dealers on the requirements for foreign currency cash pooling on behalf of International Oil Companies (IOCs) in Nigeria (the Circular).

21 February 24

The CBN noted that the practice of transferring proceeds of crude oil exports by IOCs operating in Nigeria to fund their parent accounts offshore (known as cash pooling), affects liquidity in the domestic foreign exchange market.

Cash pooling is a liquidity management technique whereby funds are physically concentrated or notionally consolidated into a single cash position.

CBN’s Directives
The CBN stated that while it supports the need for IOCs to have easy access to their export proceeds to meet their offshore obligations, this need must not be at the expense of liquidity in the Nigerian foreign exchange market. To this end, the CBN directed that (a) banks are allowed to pool cash on behalf of IOCs, subject to a maximum of 50% of the repatriated export proceeds in the first instance; and (b) the balance of 50% may be repatriated after 90 days from the date of inflow of the export proceeds.

The Circular, while not prohibiting IOCs from repatriating proceeds of their export, introduces preconditions and timelines for the repatriation. It permits repatriation of 50% of the proceeds upon receipt of the inflow, while the other 50% may be repatriated after 90 days from the day of inflow.

Should you have any questions regarding the information in this legal alert, please do not hesitate to contact, Kofo Dosekun or Funmilayo Otsemobor.


Adeyemi Kehinde – Associate