Remittance outflows drop 36% as reforms stabilise economy

Remittance outflows declined by N689.55m in 2025, reflecting a 36.09 per cent drop compared to 2024, according to data obtained from the Central Bank of Nigeria on Tuesday.

Remittance outflows are money sent from a country to recipients in other countries. In simpler terms, it’s when people, businesses, or organisations transfer funds abroad.

An analysis of the full-year figures showed that total international payment outflows fell from N1.91bn in 2024 to N1.22bn in 2025, signalling a sharp contraction in cross-border remittance flows.

The data indicates that 2024 recorded significantly higher outflows, driven by elevated monthly payments in several periods, particularly in May (N365.44m), June (N270.52m), and September (N230.30m). These three months alone accounted for over N866m, representing a substantial share of the annual total.

In contrast, 2025 posted a more subdued outflow pattern, with no single month exceeding N200.31m. The highest monthly outflow in 2025 was recorded in December at N200.31m, followed by November at N166.41m and September at N149.49m.

A breakdown of the 2025 monthly data shows a gradual but uneven trend across the year. Outflows began at N54.44m in January and rose sharply to N125.59m in February before moderating to N110.98m in March. April recorded a notable dip to N37.75m, marking one of the lowest monthly figures in the year.

The trend picked up slightly in May at N78.38m and June at N82.15m, before easing again to N75.02m in July. August saw a moderate increase to N107.55m, followed by a stronger rise in September to N149.49m.

However, October recorded a sharp drop to N33.02m, the lowest monthly outflow in 2025, before rebounding significantly in November and December to N166.41m and N200.31m, respectively. The year ended on a strong note, with the last two months accounting for over 29 per cent of total annual outflows.

Comparatively, the 2024 monthly pattern was more volatile and generally higher. After opening at N138.56m in January, outflows fell sharply to N39.15m in February but surged to N193.31m in April and peaked at N365.44m in May. This was followed by another elevated figure of N270.52m in June, underscoring sustained pressure on external payments during the period.

Further into 2024, outflows remained relatively high, with September posting N230.30m and December closing at N173.68m, reinforcing the stronger annual total recorded that year.

For January 2026, the data showed remittance outflows of N107.47m. This represents a significant year-on-year increase of N53.03m, up from N54.44m recorded in January 2025, indicating a rise of about 97.4 per cent.

On a month-on-month basis, January 2026 outflows declined sharply by N92.84m, from N200.31m in December 2025, representing a drop of approximately 46.3 per cent.

The January 2026 figure, while higher than the corresponding period in 2025, remains below several peak months in 2024 and 2025, suggesting outflows have not yet returned to the elevated levels seen in earlier periods.

Remittances support household consumption, savings, investment, and foreign exchange supply. They have also become more important in recent years as the economy sought to diversify away from volatile oil earnings.

The decline in total remittance outflows in 2025 coincided with a surge in inflows, which the CBN said tripled to about $600m monthly during the year.

This divergence suggests a strengthening of Nigeria’s net remittance position, with more foreign exchange entering the economy relative to what is leaving. It also indicates improved confidence and increased use of formal channels for diaspora remittances amid ongoing reforms.

While the data did not provide reasons for the decline, the pattern suggests that outflows remained sensitive to both domestic and international economic headwinds. The dip in remittance comes amid wider policy reforms aimed at stabilising the foreign exchange market and rebuilding confidence.

In January 2024, the central bank removed the cap on exchange rates quoted by International Money Transfer Operators, which had previously limited rates to within ±2.5 per cent of the previous day’s closing rate.

The CBN also increased the IMTO licence application fee from N500,000 in 2014 to N10m in the updated guidelines, representing a nearly 1,900 per cent increase over 10 years. A minimum operating capital requirement of $1m was set for both foreign and local IMTOs.

While IMTOs were initially barred from purchasing foreign exchange from the domestic market, recent circulars indicate that this restriction has been lifted, allowing them to trade on the official market.

The CBN established a Collaborative Task Force reporting directly to CBN Governor Olayemi Cardoso, aiming to double remittance inflows by increasing competition, engaging diaspora communities, and improving transparency in FX transactions.

Also, the CBN recently granted 14 new Approval-in-Principle licences to IMTOs, as confirmed by the Bank’s Acting Director of Corporate Communications, Mrs Hakama Sidi Ali. The reforms have streamlined regulatory procedures, onboarded more IMTOs, and enhanced measures to increase the supply of foreign currencies.

The CBN, in collaboration with the Nigeria Inter-Bank Settlement System, also launched the Non-Resident Bank Verification Number (NRBVN) platform, a significant initiative aimed at enhancing financial access for Nigerians in the diaspora.

The platform, which enables Nigerians abroad to obtain their BVN remotely, removes the need for physical presence in Nigeria. Speaking at the event in Abuja, CBN Governor Olayemi Cardoso described the platform as a key milestone in the country’s financial inclusion journey.

With the launch of the NRBVN, the CBN aims to achieve $1bn in monthly remittances. “With the introduction of NRBVN and complementary policy measures, we are optimistic about achieving our ambitious target of $1bn in monthly remittance flows, a goal we believe is entirely achievable given the growing trust and convenience in formal remittance channels,” Cardoso said.

More recently, the CBN directed all International Money Transfer Operators operating in the country to open and maintain naira settlement accounts with authorised dealer banks, as part of efforts to tighten oversight of diaspora remittances and improve transparency in the foreign exchange market