The Central Bank of Nigeria (CBN) has announced a significant policy shift, banning all foreign currency payments for diaspora remittances effective May 1, 2026.
Under this new directive, the apex bank has instructed International Money Transfer Operators (IMTOs) to process all transactions exclusively through designated naira settlement accounts held within Authorized Dealer Banks (ADBs).
In a circular signed by Dr. Musa Narkoji, the Director of the Trade and Exchange Department, the CBN explained that the measure is intended to improve the oversight of funds entering the country.
The bank stated that the move is part of efforts to “enhance transparency, traceability and effective monitoring of remittance inflows into the country.”
Under this new order, those receiving money from abroad will only receive their payouts in naira rather than dollars.
This change means beneficiaries will be subject to the official NFEM exchange rates.
Industry analysts have expressed concern that this could reduce the actual value of the money received if the na
ira weakens, which would heavily impact families who depend on these funds for survival. This is particularly notable following a nearly 11.78 per cent drop in formal inflows during the first half of 2025.
Experts also suggest that while fees might increase as operators adjust to the new system, the stricter monitoring could help reduce fraud in informal channels.
For the broader economy, the policy is expected to funnel more dollars into the official market, potentially stabilizing the foreign exchange supply.
The directive explicitly mandates that all operators must align their disbursement processes with these new accounts.
The CBN stated, “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.”
The bank further clarified 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.”
While operators are allowed to maintain multiple accounts based on their business needs, the CBN is tightening the framework to ensure all inflows are captured formally.
The circular noted 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).”
Furthermore, IMTOs are required to report these accounts to the authorities, as the bank noted, “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.”
To help market efficiency, the CBN added that “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 concluded by warning that it will deploy enhanced monitoring to ensure total compliance with these new rules.
