How CBN Reforms is Boosting IMTO Remittance

By Lawal Dahiru Mamman

In what is shaping up to be one of the most significant financial breakthroughs in recent years, Nigeria’s foreign exchange inflows through International Money Transfer Operators (IMTOs) skyrocketed, hitting $4.76 billion, a staggering 44.5% jump from the $3.30 billion recorded in 2023.

This surge, analysts say, is a direct result of sweeping reforms introduced by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso, who assumed office in September 2023.

Behind these figures lies a calculated and ambitious policy shift. In January 2024, the CBN issued a circular removing the previous cap on exchange rates quoted by IMTOs. Previously, operators were restricted to rates within a narrow range of -2.5% to +2.5% around the Nigerian Foreign Exchange Market’s closing rate.

By the end of that same month, the apex bank rolled out revised operational guidelines for IMTOs. These included a steep increase in licence application fees — from N500,000 in 2014 to N10 million in 2024, representing a near 1,900% rise over a decade.

The CBN also set a new minimum operating capital requirement of $1 million for both foreign and local IMTOs.

In a bold regulatory move, IMTOs were initially barred from purchasing foreign exchange from the domestic market to meet their obligations — a policy later reversed through another circular, allowing them to trade on the official market once again.

Perhaps most strategically, the CBN struck an agreement with IMTOs to establish a Collaborative Task Force tasked with doubling Nigeria’s remittance inflows. This task force, reporting directly to Governor Cardoso, has been instrumental in engaging with the diaspora, intensifying competition among operators, and promoting transparency in forex transactions.

The central bank also granted 14 new Approvals-in-Principle to IMTOs, signalling an aggressive push to expand the remittance ecosystem. Streamlined processes, onboarding of more operators, and stronger measures to ensure a steady supply of foreign currencies have all combined to fortify Nigeria’s FX reserves.

The ripple effects of these reforms extend beyond the numbers. Remittances remain a lifeline for millions of Nigerian households, funding everything from school fees to small businesses.

On a macroeconomic scale, the increased foreign currency supply has provided breathing space for the naira, helped stabilize the forex market, and bolstered Nigeria’s position in global trade.

Still, the journey is far from over. As global economic uncertainties loom and domestic challenges persist, sustaining this momentum will require the CBN to remain proactive, flexible, and deeply engaged with both local and international stakeholders.

For now, one thing is certain: the surge in IMTO inflows is not just a windfall — it is a testament to the power of bold policy decisions in reshaping the trajectory of an economy long hampered by volatility and mistrust.