Nigeria’s Central Bank has introduced a revised remittance‑inflow policy aimed at tightening foreign‑exchange (FX) liquidity, curbing the activities of informal money‑transfer operators (IMTOs) and bolstering the stability of the official market. The move, announced by the Central Bank of Nigeria (CBN) in early May, seeks to direct a larger share of diaspora inflows into the regulated banking system while preserving the FX reserves that have been under pressure from sustained macro‑economic outflows.
The new framework requires that all foreign‑currency remittances be processed through CBN‑licensed banks or approved payment service providers. Payments received by IMTOs must now be converted into Naira within 48 hours, after which the funds are to be transferred to the designated bank account of the beneficiary. Failure to comply will attract fines and possible revocation of operating licences. The policy also introduces a ceiling of US$5,000 per transaction for IMTOs, a reduction from the previous US$10,000 limit, and mandates that any amount above this threshold be routed through the formal banking channel.
In a statement to the press, the CBN’s Director of the Currency Management Division, Mr. Chukwuma Okoli, explained that the reform is intended to “plug the leakages that have historically eroded our foreign‑exchange reserves and to ensure that remittance inflows, which are a vital source of hard currency, are fully captured within the official system.” He noted that Nigeria receives an estimated US$30 billion in remittances annually, a figure that, while significant, falls short of offsetting the country’s larger macro‑economic outflows.
Industry participants have offered mixed reactions. The Nigeria Payments Association (NPA) welcomed the effort to formalise inflows, arguing that it could enhance transparency and reduce the exchange‑rate differentials that have long plagued the market. Conversely, the Association of Money Transfer Operators (AMTO), which represents many of the country’s IMTOs, warned that the tighter controls could push a portion of the diaspora to seek alternative, less regulated channels, potentially undermining the policy’s objectives.
Analysts at investment bank DLM Advisory observed that the restriction on IMTO transaction size may indeed encourage high‑value senders to use bank transfers, but it could also spur the growth of digital platforms that operate outside the current regulatory scope. “If the formal sector cannot offer comparable speed and cost‑effectiveness, we may see a shift toward fintech solutions that are not yet fully supervised,” the advisory’s senior economist, Mrs. Aisha Bello, said.
The policy also ties the release of foreign‑exchange to documented export earnings and the achievement of specific foreign‑exchange reserve targets. Banks that meet these benchmarks will receive priority access to FX allocations, incentivising them to facilitate remittance conversions promptly.
Since the announcement, early data indicate a modest uptick in remittance transactions flowing through the official banking corridor. However, the Central Bank’s own figures reveal that the total volume of foreign‑currency inflows remains insufficient to offset the persistent outflows driven by import bills, debt service and capital flight. The CBN cautioned that while the policy may improve liquidity in the short term, sustained macro‑economic reforms are essential to restore confidence in the Naira and achieve lasting FX stability.
The revised remittance regime is set to take full effect on 1 June, with a grace period for existing IMTOs to align their operations. Observers will be watching how quickly the diaspora adapts to the new requirements and whether the measures can stem the erosion of Nigeria’s foreign‑exchange reserves without inadvertently expanding the informal financial sector.
