Nigeria’s remittance inflows through International Money Transfer Operators (IMTOs) declined sharply in the first half of 2025, underscoring persistent challenges in attracting foreign exchange through formal channels despite ongoing reforms in the forex market. Data from the latest quarterly statistical bulletin released by the Central Bank of Nigeria shows that IMTO inflows fell by 11.78% year-on-year to $2.07 billion between January and June 2025, compared with $2.34 billion recorded in the corresponding period of 2024. This represents a shortfall of about $275.93 million and highlights the fragile state of dollar inflows at a time when the economy is grappling with elevated inflation and FX liquidity constraints.
Diaspora remittances remain one of Nigeria’s most important and stable sources of foreign exchange, supporting household consumption, small businesses, and the country’s balance-of-payments position. As such, the decline in IMTO inflows has raised concerns among policymakers and market watchers, particularly given the reforms introduced over the past year to encourage more remittances to flow through official channels.
A closer look at the data shows that the sharpest decline occurred in the first quarter of 2025. IMTO inflows between January and March stood at $888.39 million, down from $1.08 billion in the same period of 2024, representing a year-on-year drop of about $193.14 million or 17.9%. January recorded the steepest fall, with inflows declining by roughly 27.8% to $281.97 million from $390.86 million a year earlier. February receipts also weakened, falling by 11.6% to $288.82 million, while March inflows dipped by 12.7% to $317.60 million.
The pace of decline moderated in the second quarter, largely due to a significant spike in April. Total IMTO inflows between April and June 2025 amounted to $1.18 billion, only about 6.6% lower than the $1.26 billion recorded in the same quarter of 2024. April stood out with inflows of $597.44 million, representing a robust 28.2% increase compared with April 2024. However, this improvement proved short-lived, as inflows weakened again in May and June. May receipts fell by 28.8% to $288.17 million, while June declined by 25.0% to $292.25 million. Although the April surge helped cushion the overall half-year performance, it was not enough to reverse the broader downward trend.
The decline in formal remittance inflows is notable given the series of policy measures introduced by the CBN to liberalise the IMTO segment and improve transparency. In January 2024, the apex bank removed the cap on exchange rates quoted by IMTOs, allowing rates to better reflect market realities. This was followed by revised operational guidelines that significantly increased licensing requirements, including raising the IMTO application fee from N500,000 to N10 million and setting a minimum operating capital threshold of $1 million. IMTOs were also initially barred from sourcing FX from the domestic market, although this restriction has since been relaxed, allowing them to trade on the official market.
In addition, the CBN established a Collaborative Task Force with IMTOs aimed at doubling remittance inflows into the country. The task force reports directly to Olayemi Cardoso, reflecting the strategic importance attached to diaspora remittances as a source of stable FX supply.
Despite these efforts, analysts point to global headwinds as a key factor behind the decline. Inflationary pressures in advanced economies, tighter labour market conditions, and stricter migration policies may be squeezing disposable incomes for Nigerians abroad, reducing their capacity to remit funds home. Until these external pressures ease and domestic confidence in the FX framework strengthens further, Nigeria may continue to face challenges in fully harnessing remittances through formal IMTO channels.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
