Remittances in Nigeria

This report by FSD Africa and Cenfri examines the remittance landscape in Nigeria, identifying it as the highest recipient of remittances in Africa. While formal flows are significant, the sector is characterized by high informality, regulatory volatility, and infrastructure gaps that hinder the reduction of transaction costs and the expansion of financial inclusion.

• Nigeria receives the highest volume of remittance inflows in Africa, totaling USD 24.2 billion in 2018, which represented 5.9% of its GDP in 2017. However, official data likely underestimates these flows, as up to 50% of remittances are estimated to enter through informal channels.
• Remittance costs vary significantly by corridor; while transfers from the USA and UK are relatively competitive (averaging just over 5% and almost 6% respectively), the Cameroon-Nigeria corridor is exorbitant, with average costs exceeding 11%.
• Tight foreign exchange controls and managed exchange rate policies by the Central Bank of Nigeria (CBN) drive informality. Large black-market premiums (around 33%) make informal channels more attractive and are cited by stakeholders as the most expensive business driver.
• The regulatory environment is characterized by frequent changes and high barriers to entry. MTO licenses require a minimum capital of ₦2 billion and presence in at least seven countries, while outbound transfers are capped at USD 1,000 per quarter per person.
• Nigeria possesses a modern National Payment System (NPS) featuring the NIBSS, which facilitates instant payments (NIP) and a centralized biometric identification system (BVN) that uniquely identifies 33.3 million customers to ease onboarding.
• Physical and digital access points are insufficient. Nigeria has approximately 17 active financial access points per 100,000 adults, significantly lower than Kenya (181) or Uganda (116). The Shared Agent Network Expansion (SANEF) programme aims to increase the agent force to 500,000.
• Financial inclusion remains low and stagnant, with the proportion of financially excluded adults increasing from 39.5% in 2014 to almost 42% in 2016. Mobile money account ownership is particularly low at around 6% of adults.
• KYC requirements, specifically the insistence on proof of address and the Bank Verification Number (BVN), act as barriers to entry. Only 39% of Nigerian adults possess both an ID and proof of address.
• Operational costs for formal providers are inflated by cybercrime, poor electricity (only 60% population coverage), and network downtime, which erode consumer trust in digital solutions.
• Security challenges in the North-East due to the Boko Haram insurgency since 2009 have disrupted services, increased operational costs, and hindered agent recruitment in the Lake Chad basin.

APA

Cooper, B., & Esser, A. (2019). Remittances in Nigeria. FSD Africa. https://fsdafrica.org/wp-content/uploads/2025/05/Barriers-to-remittances-in-SSA-vol-6-Nigeria.pdf

Chicago

Cooper, Barry, and Antonia Esser. Remittances in Nigeria. FSD Africa, 2019. https://fsdafrica.org/wp-content/uploads/2025/05/Barriers-to-remittances-in-SSA-vol-6-Nigeria.pdf.

Wikipedia

{{cite report |last1=Cooper |first1=Barry |last2=Esser |first2=Antonia |title=Remittances in Nigeria |publisher=FSD Africa |date=June 2019 |url=https://fsdafrica.org/wp-content/uploads/2025/05/Barriers-to-remittances-in-SSA-vol-6-Nigeria.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cooper2019remittances, author = {Cooper, Barry and Esser, Antonia}, title = {{Remittances in Nigeria}}, institution = {FSD Africa}, year = {2019}, month = jun, url = {https://fsdafrica.org/wp-content/uploads/2025/05/Barriers-to-remittances-in-SSA-vol-6-Nigeria.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }