The Central Bank of Nigeria (CBN) has unveiled a landmark naira settlement policy that will transform how diaspora remittances are received across the country. Starting May 1, all international money transfer operators (IMTOs) must channel funds into naira settlement accounts, ensuring recipients receive money exclusively in local currency. This move ends the longstanding practice of dollar-denominated payouts and signals a major shift in Nigeria’s financial landscape.
The policy aims to retain more value within the domestic economy and improve regulatory oversight of foreign exchange flows. According to Musa Nakorji, Director of the CBN’s Trade and Exchange Department, “All IMTOs are directed to open naira settlement accounts and route all transactions through them, enhancing traceability and compliance.” Operators may maintain multiple accounts across authorized banks, and all transactions—including payments to beneficiaries—must pass through these accounts.
Beyond operational changes, the CBN is introducing a benchmark pricing mechanism linked to real-time market rates on Bloomberg’s BMatch platform. This ensures transparency, strengthens price discovery, and encourages participation in the official FX market while discouraging informal currency channels. The apex bank also emphasizes strict compliance with anti-money laundering and counter-terrorism financing rules, reinforcing financial system integrity.
The reforms are part of Nigeria’s broader effort to modernize cross-border payments, enhance digital financial inclusion, and support SMEs engaged in global trade. Governor Olayemi Cardoso highlighted that digital payment inefficiencies—such as high remittance costs, settlement delays, and fragmented systems—have historically limited access. By improving infrastructure and regulatory frameworks, the CBN aims to make cross-border transactions faster, more affordable, and widely accessible.
The policy comes amid Nigeria’s continued rise as a fintech hub, attracting significant investment and fostering innovation. With Nigeria recently removed from the FATF grey list, these reforms reinforce the country’s credibility in global financial markets. For millions of Nigerians reliant on diaspora funds, the naira settlement policy represents both a new economic reality and an opportunity for a more integrated, resilient financial system.
source: punch