The Central Bank of Nigeria (CBN) has issued a directive requiring all International Money Transfer Operators (IMTOs) to open naira settlement accounts within the Nigerian banking system, marking a significant shift in the country’s remittance framework.
Under the new policy, all diaspora remittance inflows will be processed and disbursed in naira, effectively ending the long-standing practice of paying recipients in foreign currency, particularly the US dollar. The directive is set to take effect from May, signalling a decisive move by monetary authorities to strengthen local currency utilisation and improve oversight of foreign exchange flows.
According to the apex bank, IMTOs are now mandated to route all remittance transactions through their designated naira accounts, ensuring that funds sent from abroad are converted within the formal banking system before reaching beneficiaries. The policy is expected to enhance transparency, deepen liquidity in the domestic foreign exchange market, and support ongoing efforts to stabilise the naira.
For decades, Nigerians receiving funds from relatives in the diaspora had the option of collecting remittances in dollars, a practice that provided a hedge against currency volatility but also contributed to increased demand for foreign exchange in the parallel market. With the new regulation, recipients will instead receive the naira equivalent at prevailing exchange rates determined within the official financial system.
Financial analysts suggest the move could help boost official foreign exchange supply and reduce speculative pressures on the naira, particularly if remittance inflows—one of Nigeria’s largest sources of foreign exchange—are fully captured within regulated channels. However, concerns remain over the potential impact on recipient value, especially in periods of exchange rate fluctuations.
The directive also places operational demands on IMTOs, which must now align with local banking regulations, strengthen compliance frameworks, and ensure seamless conversion and disbursement processes for customers.
While the policy underscores the CBN’s broader strategy to consolidate control over foreign exchange management and promote naira stability, its success will depend on effective implementation, market confidence, and the ability to maintain competitive and transparent exchange rates.
As the May rollout approaches, stakeholders across the financial ecosystem will be closely monitoring how the transition reshapes remittance flows, recipient experiences, and Nigeria’s broader foreign exchange dynamics.
