Nigeria recorded a notable decline in remittance inflows through International Money Transfer Operators (IMTOs) in the first half of 2025, underscoring persistent pressure on formal foreign-exchange inflows despite ongoing reforms in the FX market.
Data from the Central Bank of Nigeria’s (CBN) latest quarterly statistical bulletin show that total IMTO inflows fell by 11.78 per cent year-on-year to $2.07bn between January and June 2025, compared with $2.34bn in the corresponding period of 2024. This translates to a shortfall of about $275.93m.
Diaspora remittances remain a critical source of foreign exchange for Nigeria, supporting household consumption, easing balance-of-payments pressures, and helping to cushion the economy amid high inflation. However, the latest figures suggest that formal remittance channels are yet to see a sustained recovery, even with policy adjustments aimed at improving inflows.
Sharp drop in first quarter
A closer look at the data shows that the decline was most pronounced in the first quarter of 2025. IMTO inflows between January and March stood at $888.39m, down from $1.08bn in the same period of 2024. This represents a year-on-year contraction of about $193.14m, or 17.9 per cent.
January recorded the steepest fall, with inflows declining by 27.8 per cent to $281.97m from $390.86m a year earlier. February inflows dropped to $288.82m from $326.91m, while March receipts slipped to $317.60m from $363.76m, reflecting declines of 11.6 per cent and 12.7 per cent respectively.
April rebound tempers losses
The trend moderated in the second quarter, largely due to a strong rebound in April. Total inflows for April to June 2025 amounted to $1.18bn, only 6.6 per cent lower than the $1.26bn recorded in the second quarter of 2024.
April stood out with inflows of $597.44m, representing a 28.2 per cent increase from $466.11m in April 2024. However, the momentum was not sustained. In May, inflows fell sharply to $288.17m from $404.75m a year earlier, a decline of 28.8 per cent. June followed a similar pattern, with receipts dropping by 25 per cent to $292.25m from $389.79m.
While the April surge helped soften the overall half-year decline, it was insufficient to reverse the broader downward trend that characterised most of the period.
Policy reforms and lingering challenges
The decline in IMTO inflows comes despite a series of reforms introduced by the CBN to attract more remittances through official channels. In January 2024, the apex bank removed the cap on exchange rates quoted by IMTOs, which had previously restricted rates to within ±2.5 per cent of the prior day’s closing rate at the Nigerian Foreign Exchange Market.
The CBN also issued revised operational guidelines for IMTOs, significantly increasing the application fee for an IMTO licence from N500,000 in 2014 to N10m, a rise of about 1,900 per cent over a decade. In addition, minimum operating capital requirements were set at $1m for both foreign and local IMTOs.
Under the revised framework, IMTOs were initially barred from purchasing foreign exchange from the domestic market to meet their obligations. However, a subsequent circular appears to have relaxed this restriction, allowing IMTOs to participate in the official FX market.
The central bank has also engaged IMTOs through a Collaborative Task Force, established to double remittance inflows into Nigeria. The task force reports directly to the CBN Governor, Olayemi Cardoso, highlighting the strategic importance policymakers place on diaspora remittances as a stable source of FX supply.
Global headwinds weigh on inflows
Analysts note that external factors may be weighing on remittance flows. Inflationary pressures in advanced economies, where many Nigerians in the diaspora live and work, alongside tighter labour markets and stricter migration policies, may have reduced disposable incomes and the capacity to send funds home.
Despite the recent decline, remittances continue to play a vital role in supporting Nigerian households. The challenge for policymakers remains how to translate FX reforms and institutional engagement with IMTOs into a sustained recovery in formal remittance inflows amid an uncertain global environment.