Nigeria has experienced an 11.78% decrease in remittance inflows channeled through International Money Transfer Operators (IMTOs) during the first half of 2025, when compared to the same period in 2024. Official figures from the Central Bank of Nigeria’s (CBN) latest quarterly statistical bulletin reveal that total IMTO inflows dropped to $2.07 billion between January and June 2025, a notable decline from the $2.34 billion recorded in the corresponding six months of the previous year. This represents a shortfall of approximately $275.93 million year-on-year, indicating persistent challenges in bolstering formal foreign exchange liquidity.
Remittances serve as a crucial source of foreign exchange for Nigeria, significantly supporting household consumption and positively impacting the country’s balance-of-payments. The latest data suggests that despite ongoing foreign exchange market reforms and concerted efforts to engage with IMTOs to enhance receipts, formal inflows continue to face downward pressure. This trend raises concerns about the effectiveness of current strategies in attracting much-needed foreign currency into the Nigerian economy.
A deeper analysis of the data highlights that the first quarter of 2025 bore the brunt of this decline. IMTO inflows for January to March 2025 amounted to $888.39 million, a substantial decrease from $1.08 billion in the same period of 2024. This represents a year-on-year drop of about 17.9%, translating to a loss of nearly $193.14 million. The month of January 2025 saw inflows fall to $281.97 million from $390.86 million a year earlier, a stark decrease of roughly 27.8%.
February and March 2025 also reflected this downward trend, with inflows dipping to $288.82 million from $326.91 million in February and $317.60 million from $363.76 million in March. However, the overall decline for the first half of the year was somewhat softened by a significant surge in inflows during April 2025. Total IMTO inflows for April to June 2025 reached $1.18 billion, which was only about 6.6% lower than the $1.26 billion recorded in the second quarter of 2024.
The month of April 2025 specifically stood out, registering $597.44 million in inflows, a notable increase of 28.2% compared to $466.11 million in April 2024. This spike, however, could not offset the weakening trend observed in May and June. Inflows in May 2025 fell to $288.17 million from $404.75 million in the prior year, a decline of 28.8%, while June 2025 saw inflows drop to $292.25 million from $389.79 million, a decrease of 25.0%. The April surge, therefore, ultimately proved insufficient to reverse the overarching downward trajectory.
Despite the decline in formal IMTO channels, remittances continue to be an essential lifeline for Nigerian households, particularly in the face of high inflation. This downturn occurs despite recent initiatives by monetary authorities aimed at stabilizing the foreign exchange market and encouraging greater dollar inflows through official systems. In January 2024, the CBN removed previous caps on exchange rates quoted by IMTOs, a move intended to make remittances more attractive.
Further regulatory adjustments followed, including revised guidelines for IMTO operations that significantly increased the application fee for an IMTO license and established minimum operating capital requirements. Initially, IMTOs were also barred from purchasing foreign exchange from the domestic market, a restriction that appears to have since been lifted, allowing them to trade on the official market again. The CBN also formed a Collaborative Task Force with IMTOs to double remittance inflows, reporting directly to the Governor.
Policymakers consistently highlight diaspora remittances as a vital and stable source of foreign exchange. However, potential global economic factors may be contributing to the slowdown. Persistent inflationary pressures in advanced economies where many Nigerians reside, coupled with tightening labor market conditions and more stringent migration policies, could be reducing the disposable income available for sending remittances back home. These external pressures, combined with domestic economic dynamics, present a complex challenge for Nigeria’s foreign exchange landscape.
