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 strengthening stability in the official market.
The move, announced by the Central Bank of Nigeria (CBN) in early May, seeks to channel a larger share of diaspora inflows into the regulated banking system while preserving FX reserves that have come under pressure from sustained macroeconomic outflows.
Under the new framework, all foreign-currency remittances must be processed through CBN-licensed banks or approved payment service providers. Payments received by IMTOs must be converted into Naira within 48 hours, after which the funds are transferred to beneficiaries’ designated bank accounts. Non-compliance will attract fines and possible revocation of operating licences.
The policy also introduces a US$5,000 per-transaction cap for IMTOs, down from the previous US$10,000 limit. Any amount above this threshold must be routed through formal banking channels.
In a statement, the CBN’s Director of the Currency Management Division, Mr. Chukwuma Okoli, said the reform is intended to “plug the leakages that have historically eroded our foreign-exchange reserves” and ensure that remittance inflows are fully captured within the official system. He noted that Nigeria receives an estimated US$30 billion in remittances annually, though this remains insufficient to offset broader macroeconomic outflows.
Industry reactions have been mixed. The Nigeria Payments Association (NPA) welcomed the move, saying it could improve transparency and reduce exchange-rate distortions. However, the Association of Money Transfer Operators (AMTO) warned that tighter controls may push some users toward less regulated channels, potentially weakening the policy’s effectiveness.
Analysts at DLM Advisory noted that while the transaction cap could redirect high-value transfers to banks, it may also accelerate the growth of fintech platforms operating outside existing regulatory oversight. Senior economist Mrs. Aisha Bello added that if formal channels cannot match the speed and cost efficiency of alternatives, users may migrate to unregulated solutions.
The policy also links foreign-exchange access to verified export earnings and reserve targets, with banks meeting these benchmarks given priority FX allocations to encourage faster remittance processing.
Early indicators suggest a slight increase in remittance flows through official channels since the announcement. However, CBN data shows that inflows remain insufficient to offset persistent outflows from imports, debt servicing, and capital flight.
The CBN cautioned that while the policy may improve short-term liquidity, broader structural reforms will be necessary to restore confidence in the naira and achieve long-term FX stability.
The revised remittance framework is scheduled to take full effect on 1 June, with a transition period for IMTOs to adjust. Observers will be monitoring how the diaspora responds and whether the measures can strengthen FX reserves without expanding informal financial activity.
