How Money Sent Home Reaches Nigeria
Remittances are now comparable in scale to much of Nigeria's oil earnings — and the rules on how they are paid out changed this year.
Money sent home by Nigerians living abroad is one of the country's largest sources of foreign currency. It is also one of the least discussed, because it arrives in millions of small transactions rather than in headline deals.
The scale
Nigeria received US$21.806 billion in diaspora remittances in 2025, according to the CBN's Q4 2025 Quarterly Statistical Bulletin. That is essentially flat on 2024's US$21.811 billion, which itself was 13.16% up on 2023's US$19.27 billion.
The quarterly path through 2025 ran from US$5.122 billion in Q1 to US$5.72 billion in Q4.
To put that in perspective: it is a flow of foreign currency that arrives without Nigeria having to extract, refine or ship anything, and it goes directly to households rather than through government accounts.
How it moves
An International Money Transfer Operator (IMTO) — Western Union, MoneyGram, Remitly and others — is licensed by the CBN to receive funds abroad and arrange payout in Nigeria. The sender pays in the foreign country; a partner bank or agent pays out locally.
Alongside the licensed channel there has always been an informal one: cash carried by travellers, and matched-payment arrangements where someone abroad pays a counterparty's contact overseas while their associate in Nigeria pays the recipient in naira. Informal channels typically offer a better rate and no paperwork, which is precisely why the CBN has spent years trying to compete with them.
The 2024 reforms
The CBN issued revised IMTO licensing and operational guidelines on 31 January 2024. Three things changed:
- The cap on the rate IMTOs could offer was removed, letting them compete on price.
- IMTOs were permitted to sell foreign exchange into the official market.
- Licensing requirements were revised.
The effect was measurable. Monthly IMTO inflows rose from roughly US$250 million to US$947 million over the reform period, against a CBN target of US$1 billion per month.
That is the clearest evidence available that the formal-versus-informal split responds to pricing rather than to enforcement. When the official channel offered a competitive rate, volume moved into it.
The 2026 change: naira-only payouts
Effective 1 May 2026, the CBN directed all IMTOs to open naira settlement accounts and pay recipients in naira only, converted at the official Bloomberg BMatch rate. Foreign-currency payouts ended. The directive was issued in March 2026.
The stated rationale was an 11.78% fall in IMTO inflows in the first half of 2025 as flows migrated back to informal channels.
The logic is that if recipients can only get naira through the formal channel anyway, and the official rate is competitive, there is less reason to route around it. The counter-argument is that removing the option to receive dollars removes a store of value that some recipients specifically wanted, and pushes those recipients — not the casual ones — further into informal arrangements.
Which effect dominates will show up in the 2026 and 2027 inflow figures.
A note on sourcing
We could not open the CBN circular itself for the naira-payout directive. The date and substance are consistent across four independent secondary sources. If the precise terms matter to you — for a business decision, say — verify with your bank or with the CBN directly.
What it means for a receiving household
If someone abroad sends you money through a licensed operator, you will receive naira, converted at the official rate, at a bank or agent. You will need identification. Charges are borne mostly at the sending end.
If you were previously receiving dollars and holding them, that option is no longer available through licensed operators.
Frequently asked questions
Can I still receive dollars from abroad? Not through a licensed IMTO payout, since 1 May 2026. Wire transfers into a domiciliary account are a different mechanism with different rules — ask your bank.
What rate will I get? The official rate at the point of conversion, referenced to Bloomberg BMatch.
Is using an informal channel illegal? Operating as an unlicensed money transmitter is a regulatory offence. The position of an individual recipient is a question for a lawyer, not for us.
Sources
- 2025 remittance total — Vanguard, May 2026
- IMTO guidelines, 31 January 2024 — CBN Reforms
- Inflow growth under the reforms — Leadership
- Naira-only payout directive — Technext