By David Akinmola
Industry experts have said the recent directive by the Central Bank of Nigeria requiring International Oil Companies (IOCs) to repatriate and domicile export proceeds in Nigeria will stimulate fresh investments in the upstream oil and gas sector.
The policy, which mandates oil firms to channel export earnings through the domestic financial system, is aimed at improving foreign exchange liquidity, enhancing transparency and strengthening the country’s external reserves.
Analysts note that beyond its immediate impact on the foreign exchange market, the directive could restore investor confidence in the upstream segment by providing greater clarity on revenue flows and regulatory expectations.
An energy economist said the move signals a more structured and predictable operating environment for investors.
“By ensuring that export earnings are properly accounted for within the domestic system, the policy reduces opacity and improves fiscal planning. This can encourage reinvestment in exploration and production activities,” the expert said.
From an industry standpoint, stakeholders argue that improved liquidity in the foreign exchange market would ease funding constraints often faced by upstream operators, particularly in sourcing equipment and financing large-scale projects.
They also point out that the directive aligns with broader efforts by the Federal Government to optimise oil revenues and strengthen macroeconomic stability amid persistent foreign exchange pressures.
However, some operators caution that the effectiveness of the policy will depend on implementation and the ability of regulators to balance compliance with operational flexibility for IOCs.
“There is a need to ensure that while enforcing repatriation, the policy does not create bottlenecks that could discourage investment or delay project execution,” an upstream industry executive noted.
Experts further emphasise that increased transparency and improved FX inflows could enhance Nigeria’s attractiveness as an investment destination, especially as global capital becomes more selective in response to energy transition dynamics.
They add that the directive, if sustained, could complement ongoing reforms in the oil and gas sector, including efforts to boost production capacity and attract new entrants into the upstream space.
While challenges remain, stakeholders maintain that the policy represents a strategic step toward strengthening Nigeria’s oil revenue framework and unlocking new investment opportunities in the upstream segment.
