The Central Bank of Nigeria (CBN) has announced that all diaspora remittances will be paid out exclusively in naira from May 1, 2026, marking a significant shift in the country’s foreign exchange framework and remittance policy.
The directive requires International Money Transfer Operators (IMTOs) to route all transactions through designated naira settlement accounts held with Authorised Dealer Banks (ADBs), effectively ending the practice of disbursing remittances in foreign currencies such as the United States dollar. The move is aimed at strengthening oversight, improving transparency, and ensuring that remittance inflows are fully captured within the formal financial system.
In a circular signed by the Director of the Trade and Exchange Department, Dr Musa Narkoji, and addressed to IMTOs, ADBs, and the general public, the apex bank stated that the measure is part of broader efforts to enhance traceability and monitoring of diaspora remittances. The policy also seeks to stabilise the foreign exchange market by directing inflows through official channels.
Under the new arrangement, recipients of diaspora remittances will receive payments strictly in naira, exposing them to exchange rate movements determined by official Nigerian Foreign Exchange Market (NFEM) rates. Analysts have noted that this could affect the value of remittances received by households, particularly if the naira depreciates, with potential implications for families that rely on such inflows for daily expenses. This concern comes amid a reported 11.78 per cent decline in formal remittance inflows to $2.07 billion in the first half of 2025.
Experts have also indicated that transaction costs may increase as operators adjust to the naira-based settlement system. However, they noted that improved monitoring under the policy could help reduce fraud and limit the use of informal channels.
For the broader economy, analysts expect the directive to improve foreign exchange liquidity by ensuring that remittance dollars are channelled into the official market through ADBs and the NFEM, potentially supporting exchange rate stability in an economy heavily dependent on oil revenues.
The CBN directed that all IMTOs must open and maintain naira settlement accounts with ADBs and ensure full compliance with the new framework. The bank stated that “all IMTOs are hereby directed to open Naira settlement accounts and ensure that all transactions are routed strictly through their designated settlement accounts maintained with Authorised Dealer Banks (ADBs) in Nigeria.”
It further stated that “all transactions arising from international money transfer operations, including disbursements to beneficiaries and any related settlements, must be processed exclusively through the IMTO’s settlement accounts held with any ADB of their choice.”
The apex bank added that IMTOs may operate multiple accounts, noting that they “may use their discretion to designate their existing accounts or open new settlement accounts and may operate accounts with multiple ADBs in line with their business strategy.”
To strengthen regulatory control, the CBN clarified that “settlement accounts shall only be credited with remittance flows and proceeds of foreign exchange conversions by licensed IMTOs (or their agents) with authorised market participants in the Nigerian Foreign Exchange Market (NFEM).”
It also directed that IMTOs must properly designate and report their accounts, stating that “a list of designated settlement accounts shall be advised by each licensed IMTO to the director, Trade and Exchange Department, and updated regularly as necessary.”
“In order to support market efficiency and enhance pricing outcomes for IMTO transactions, ADBs may process foreign currency transfers from IMTO settlement accounts to other ADBs and other market participants including BDCs.”
The CBN emphasised that strict compliance with the directive is mandatory, warning that enhanced monitoring mechanisms will be implemented to ensure full adherence, as part of ongoing reforms to improve transparency and efficiency in Nigeria’s foreign exchange system.
