In a landmark regulatory move meant to reshape Nigeria’s remittance landscape, the Central Bank of Nigeria (CBN) has issued a directive banning the payment of diaspora remittances in foreign currencies among financial institutions. Effective May 1, 2026, all International Money Transfer Operators (IMTOs) must process transactions exclusively through designated naira settlement accounts maintained in Authorized Dealer Banks (ADBs). This shift which was formalized in a circular signed by Dr. Musa Narkoji, Director of the CBN’s Trade and Exchange Department, applies to all IMTOs, ADBs, and the general public.
It underscores the apex bank’s broader strategy to enhance transparency, traceability, and regulatory oversight of remittance inflows, while promoting effective monitoring within Nigeria’s foreign exchange market. Under the new framework, recipients of diaspora remittances will receive payouts only in naira, eliminating the option for dollar or other foreign currency disbursements. Payments will be made at official Nigerian Foreign Exchange Market (NFEM) rates, exposing beneficiaries to fluctuations in the naira’s value, a move analysts warn could erode remittance value if the naira depreciates further. This comes amid a reported 11.78% drop in formal remittance inflows of up to $2.07 billion in the first half of 2025.
While some experts caution that settlement fees may increase as operators transition to naira-based accounts, others highlight the potential for improved oversight and reduced fraud risk in informal transfer channels. For Nigeria’s economy, the CBN’s directive is expected to boost foreign exchange liquidity by channeling more dollars into the official market, potentially stabilizing supply in a market heavily reliant on oil revenues.
The CBN has mandated that all IMTOs open and maintain naira settlement accounts with ADBs, and stipulates that all related transactions, disbursements, settlements, or fund transfers, must be routed exclusively through these accounts. Operators may open multiple accounts with different ADBs, aligning with their business strategies, and are required to regularly report designated settlement accounts to the bank’s Trade and Exchange Department.
The apex bank emphasized strict compliance, noting that enhanced monitoring systems will be deployed to ensure full adherence. The central message is clear: CBN is intent on plugging leakages, capturing all inflows within the formal financial system, and strengthening regulatory control over Nigeria’s vital remittance streams.
