Simplifying remittances, licensing new IMTOs, and championing a willing buyer-willing seller model, the Central Bank of Nigeria (CBN), is aggressively courting foreign exchange to stabilise the economy. Foreign exchange inflows remain a vital pillar of Nigeria’s monetary and fiscal stability drive. In a country highly dependent on imports and vulnerable to external shocks, the availability of dollars—and the policies governing their flow—can make or break macroeconomic planning. This reality has come into even sharper focus over the past year, with the naira battered by bouts of severe volatility. Exchange rates have swung wildly, driven by factors such as fluctuating oil export earnings, capital flight, and heavy demand for dollars to pay for imports. In a stark illustration, the naira at one point traded above N1,800/$1 on the parallel market before the Central Bank of Nigeria (CBN) stepped up interventions and reforms to narrow the gap. Faced with this pressure, the CBN has embarked on an aggressive strategy to cultivate more sources of foreign exchange. The goal is clear: increase dollar inflows, boost liquidity for manufacturers and other end-users, and reduce the premium between official and parallel market rates. Diversifying FX Sources: A Policy Pivot At the heart of the CBN’s plan is a recognition that oil alone cannot reliably fund Nigeria’s dollar needs. Though oil accounts for over 90% of export earnings, production has been erratic and global prices have been uncertain. The apex bank is therefore pursuing a deliberate diversification of FX sources. Among its major policy thrusts is the renewed focus on diaspora remittances—an area often described as Nigeria’s “new oil” because of its size and stability. Official estimates place annual remittances at around $23 billion, making it one of the country’s most important sources of external financing after crude. But, remittances are not the only focus. The apex bank is also leveraging regulatory reforms to expand the network of International Money Transfer Operators (IMTOs), refining the foreign exchange market structure, and simplifying dollar-inflow channels for dealers to promote overall business and economic growth. Making Remittances Flow: CBN’s Big Bet One of the most significant elements of the CBN’s strategy has been to transform how remittances reach Nigeria. Historically, Nigerians in the diaspora have sent money home through both formal and informal channels. Informal channels often dominate because of their perceived ease, better rates, and limited bureaucracy. But, these routes deprive the formal sector— and the central bank—of critical visibility and control over forex flows. To address this, the CBN has unveiled multiple reforms: Licensing new IMTOs: The apex bank has granted licenses to new money transfer operators, increasing competition in the sector and giving customers more choices. Product development: Collaborating with banks and IMTOs to design and launch products that make sending and receiving dollars faster and cheaper. Willing buyer-willing seller model: A market-based FX pricing approach that ensures remittances are converted at competitive rates, making formal channels more attractive. Liquidity support: Enabling timely access to naira liquidity for IMTOs to ensure smoother conversion and payout. According to industry watchers, these measures are already simplifying the process for FX dealers, lowering costs for senders, and making formal channels more appealing to the diaspora. Voices from the Industry: BDCs See Opportunity Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), is one of the prominent advocates of these reforms. He believes the policy shifts show both creativity and hard work on the part of the CBN leadership under Governor Olayemi Cardoso. “The CBN’s new approach has been very strategic,” Gwadabe told reporters recently. “They have opened up the market, simplified inflow channels, and given confidence to those sending money to Nigeria that the system will work for them.” He emphasises that diaspora remittances— estimated at $23 billion annually—remain a reliable and relatively stable source of foreign exchange. “What the CBN is doing is ensuring this flow continues to grow and remains accessible to businesses that need dollars for imports and raw materials.” Gwadabe is also optimistic about the broader market liberalisation strategy. By supporting a willing buyer-willing seller model, he argues, the CBN has helped align rates closer to market reality, boosting confidence among investors and businesses alike. Doubling Formal Remittance Receipts The CBN itself has articulated an ambitious target: doubling formal remittance receipts within a year. This is no small task in an environment where a large share of remittances still flows informally. Yet analysts believe it is achievable if reforms are sustained and deepened. The logic is simple: if formal channels are fast, cheap, and offer competitive rates, many senders will switch. Nigeria’s huge global diaspora—estimated at over 15 million people—represents a powerful customer base that can be better harnessed. Indeed, some banks and IMTOs have already responded with aggressive marketing, offering zero-fee transfers or improved customer support. Technology also plays a role: digital apps and online platforms are making cross-border transfers more seamless than ever. Beyond Remittances: Other FX Strategies While remittances are a big part of the plan, the CBN is not relying on them alone. Other sources of FX are being actively pursued. For instance: Export proceeds: The CBN is encouraging non-oil exports by offering incentives to exporters to repatriate earnings through formal channels. The RT200 programme, launched under the previous administration, is being reviewed and refined to boost effectiveness. Foreign portfolio investment (FPI): By liberalising the FX market and reducing rate distortions, the CBN hopes to attract more foreign investors back to Nigerian bonds and equities. While risky in times of uncertainty, FPI can deliver billions of dollars in short-term inflows. Foreign direct investment (FDI): A longer-term play that depends on macroeconomic stability, regulatory clarity, and investor confidence. Here, the CBN’s role intersects with broader fiscal reforms, including efforts to improve the business environment. Through these diverse strategies, the apex bank is trying to ensure that Nigeria’s FX sources are no longer a one-trick pony dependent on oil alone. Challenges on the Road Ahead Despite these policy moves, significant challenges remain. Exchange rate volatility has not disappeared. Though the gap between the official and parallel market rates has narrowed, it remains a source of anxiety for businesses and consumers alike. Inflation—driven in part by currency depreciation—remains stubbornly high, eating into household purchasing power. At over 30% by mid-2025, headline inflation continues to complicate monetary policy. Meanwhile, confidence in the naira is not fully restored. Businesses remain wary of price volatility when planning imports or investment. And while remittance reforms are welcome, they need consistent implementation and strong regulatory oversight to avoid abuse or inefficiencies. Moreover, Nigeria’s underlying structural problems—from infrastructure deficits to security concerns—still weigh on investment attractiveness. The Cardoso Factor: Leadership and Credibility Still, industry players like Aminu Gwadabe see clear signs of progress. Much of the optimism is credited to the leadership style of CBN Governor Olayemi Cardoso. Cardoso has projected a technocratic, policy-driven approach aimed at rebuilding the central bank’s credibility after a period of turmoil marked by policy U-turns and multiple exchange rates. His team has prioritised clear communication, market-based reforms, and collaboration with stakeholders—including BDC operators, commercial banks, IMTOs, and the Ministry of Finance. “There is policy clarity today,” says Gwadabe. “People know where the CBN stands. And that is very important in the FX market, where confidence is everything.” Economic Impact: Why It Matters Ultimately, the push to stabilise foreign exchange inflows is not just about technical monetary policy—it’s about the health of the broader economy. Manufacturers need dollars to import critical inputs and machinery. Retailers need them to stock goods. Service providers rely on stable FX markets to price their products predictably. Even ordinary Nigerians feel the impact daily in the price of food, fuel, and household goods, much of which is imported. By expanding FX sources, simplifying remittance channels, and encouraging market-based rates, the CBN hopes to: Improve dollar liquidity and reduce shortages Narrow the premium between official and parallel market rates Ease inflationary pressures Support private-sector investment and growth Enhance overall macroeconomic stability The Road to Sustainable FX Flows Despite the complex challenges, the current policy approach suggests a long-term vision: making Nigeria’s FX flows more diversified, formalised, and sustainable. This means not only harnessing remittances, but also improving non-oil exports, attracting investment, and managing oil proceeds more transparently. It also requires policy consistency and collaboration between the monetary and fiscal sides of government to deliver on broader reforms. In the end, a stable and liquid foreign exchange market is not just a monetary goal—it is foundational to Nigeria’s ambition of building a more resilient and diversified economy. As Nigeria navigates a turbulent global economy and its internal structural challenges, foreign exchange policy will remain at the heart of the story. The CBN’s current reforms, BAMIDELE OGUNWUSI Simplifying remittances, licensing new IMTOs, and championing a willing buyer-willing seller model, the Central Bank of Nigeria (CBN), is aggressively courting foreign exchange to stabilise the economy. Foreign exchange inflows remain a vital pillar of Nigeria’s monetary and fiscal stability drive. In a country highly dependent on imports and vulnerable to external shocks, the availability of dollars—and the policies governing their flow—can make or break macroeconomic planning. This reality has come into even sharper focus over the past year, with the naira battered by bouts of severe volatility. Exchange rates have swung wildly, driven by factors such as fluctuating oil export earnings, capital flight, and heavy demand for dollars to pay for imports. In a stark illustration, the naira at one point traded above N1,800/$1 on the parallel market before the Central Bank of Nigeria (CBN) stepped up interventions and reforms to narrow the gap. Faced with this pressure, the CBN has embarked on an aggressive strategy to cultivate more sources of foreign exchange. The goal is clear: increase dollar inflows, boost liquidity for manufacturers and other end-users, and reduce the premium between official and parallel market rates. Diversifying FX Sources: A Policy Pivot At the heart of the CBN’s plan is a recognition that oil alone cannot reliably fund Nigeria’s dollar needs. Though oil accounts for over 90% of export earnings, production has been erratic and global prices have been uncertain. The apex bank is therefore pursuing a deliberate diversification of FX sources. Among its major policy thrusts is the renewed focus on diaspora remittances—an area often described as Nigeria’s “new oil” because of its size and stability. Official estimates place annual remittances at around $23 billion, making it one of the country’s most important sources of external financing after crude. But, remittances are not the only focus. The apex bank is also leveraging regulatory reforms to expand the network of International Money Transfer Operators (IMTOs), refining the foreign exchange market structure, and simplifying dollar-inflow channels for dealers to promote overall business and economic growth. Making Remittances Flow: CBN’s Big Bet One of the most significant elements of the CBN’s strategy has been to transform how remittances reach Nigeria. Historically, Nigerians in the diaspora have sent money home through both formal and informal channels. Informal channels often dominate because of their perceived ease, better rates, and limited bureaucracy. But, these routes deprive the formal sector— and the central bank—of critical visibility and control over forex flows. To address this, the CBN has unveiled multiple reforms: Licensing new IMTOs: The apex bank has granted licenses to new money transfer operators, increasing competition in the sector and giving customers more choices. Product development: Collaborating with banks and IMTOs to design and launch products that make sending and receiving dollars faster and cheaper. Willing buyer-willing seller model: A market-based FX pricing approach that ensures remittances are converted at competitive rates, making formal channels more attractive. Liquidity support: Enabling timely access to naira liquidity for IMTOs to ensure smoother conversion and payout. According to industry watchers, these measures are already simplifying the process for FX dealers, lowering costs for senders, and making formal channels more appealing to the diaspora. Voices from the Industry: BDCs See Opportunity Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), is one of the prominent advocates of these reforms. He believes the policy shifts show both creativity and hard work on the part of the CBN leadership under Governor Olayemi Cardoso. “The CBN’s new approach has been very strategic,” Gwadabe told reporters recently. “They have opened up the market, simplified inflow channels, and given confidence to those sending money to Nigeria that the system will work for them.” He emphasises that diaspora remittances— estimated at $23 billion annually—remain a reliable and relatively stable source of foreign exchange. “What the CBN is doing is ensuring this flow continues to grow and remains accessible to businesses that need dollars for imports and raw materials.” Gwadabe is also optimistic about the broader market liberalisation strategy. By supporting a willing buyer-willing seller model, he argues, the CBN has helped align rates closer to market reality, boosting confidence among investors and businesses alike. Doubling Formal Remittance Receipts The CBN itself has articulated an ambitious target: doubling formal remittance receipts within a year. This is no small task in an environment where a large share of remittances still flows informally. Yet analysts believe it is achievable if reforms are sustained and deepened. The logic is simple: if formal channels are fast, cheap, and offer competitive rates, many senders will switch. Nigeria’s huge global diaspora—estimated at over 15 million people—represents a powerful customer base that can be better harnessed. Indeed, some banks and IMTOs have already responded with aggressive marketing, offering zero-fee transfers or improved customer support. Technology also plays a role: digital apps and online platforms are making cross-border transfers more seamless than ever. Beyond Remittances: Other FX Strategies While remittances are a big part of the plan, the CBN is not relying on them alone. Other sources of FX are being actively pursued. For instance: Export proceeds: The CBN is encouraging non-oil exports by offering incentives to exporters to repatriate earnings through formal channels. The RT200 programme, launched under the previous administration, is being reviewed and refined to boost effectiveness. Foreign portfolio investment (FPI): By liberalising the FX market and reducing rate distortions, the CBN hopes to attract more foreign investors back to Nigerian bonds and equities. While risky in times of uncertainty, FPI can deliver billions of dollars in short-term inflows. Foreign direct investment (FDI): A longer-term play that depends on macroeconomic stability, regulatory clarity, and investor confidence. Here, the CBN’s role intersects with broader fiscal reforms, including efforts to improve the business environment. Through these diverse strategies, the apex bank is trying to ensure that Nigeria’s FX sources are no longer a one-trick pony dependent on oil alone. Challenges on the Road Ahead Despite these policy moves, significant challenges remain. Exchange rate volatility has not disappeared. Though the gap between the official and parallel market rates has narrowed, it remains a source of anxiety for businesses and consumers alike. Inflation—driven in part by currency depreciation—remains stubbornly high, eating into household purchasing power. At over 30% by mid-2025, headline inflation continues to complicate monetary policy. Meanwhile, confidence in the naira is not fully restored. Businesses remain wary of price volatility when planning imports or investment. And while remittance reforms are welcome, they need consistent implementation and strong regulatory oversight to avoid abuse or inefficiencies. Moreover, Nigeria’s underlying structural problems—from infrastructure deficits to security concerns—still weigh on investment attractiveness. The Cardoso Factor: Leadership and Credibility Still, industry players like Aminu Gwadabe see clear signs of progress. Much of the optimism is credited to the leadership style of CBN Governor Olayemi Cardoso. Cardoso has projected a technocratic, policy-driven approach aimed at rebuilding the central bank’s credibility after a period of turmoil marked by policy U-turns and multiple exchange rates. His team has prioritised clear communication, market-based reforms, and collaboration with stakeholders—including BDC operators, commercial banks, IMTOs, and the Ministry of Finance. “There is policy clarity today,” says Gwadabe. “People know where the CBN stands. And that is very important in the FX market, where confidence is everything.” Economic Impact: Why It Matters Ultimately, the push to stabilise foreign exchange inflows is not just about technical monetary policy—it’s about the health of the broader economy. Manufacturers need dollars to import critical inputs and machinery. Retailers need them to stock goods. Service providers rely on stable FX markets to price their products predictably. Even ordinary Nigerians feel the impact daily in the price of food, fuel, and household goods, much of which is imported. By expanding FX sources, simplifying remittance channels, and encouraging market-based rates, the CBN hopes to: Improve dollar liquidity and reduce shortages Narrow the premium between official and parallel market rates Ease inflationary pressures Support private-sector investment and growth Enhance overall macroeconomic stability The Road to Sustainable FX Flows Despite the complex challenges, the current policy approach suggests a long-term vision: making Nigeria’s FX flows more diversified, formalised, and sustainable. This means not only harnessing remittances, but also improving non-oil exports, attracting investment, and managing oil proceeds more transparently. It also requires policy consistency and collaboration between the monetary and fiscal sides of government to deliver on broader reforms. In the end, a stable and liquid foreign exchange market is not just a monetary goal—it is foundational to Nigeria’s ambition of building a more resilient and diversified economy. As Nigeria navigates a turbulent global economy and its internal structural challenges, foreign exchange policy will remain at the heart of the story. The CBN’s current reforms, from opening new IMTO channels to promoting a willing buyer-willing seller FX model, are ambitious attempts to secure the country’s dollar future. Success is not guaranteed. But if sustained and scaled, these reforms may well become a turning point—laying the foundation for a more stable naira, a stronger economy, and a better deal for millions of Nigerians at home and abroad. from opening new IMTO channels to promoting a willing buyer-willing seller FX model, are ambitious attempts to secure the country’s dollar future. Success is not guaranteed. But if sustained and scaled, these reforms may well become a turning point—laying the foundation for a more stable naira, a stronger economy, and a better deal for millions of Nigerians at home and abroad.