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Nigeria Resources

Summary

Various restrictions surrounding sending money from Nigeria. The Central Bank of Nigeria (CBN) revised up the amount that may be sent out of the country in a single person-to-person transfer from US$2,000 to US$5,000 in early October 2014, which may help to encourage even more outbound transfers in the near future. The payment must be handed over to the Nigerian transfer provider in naira before being converted into a foreign currency for transfer. Money transfer to Nigeria is much less restricted. Sending money to Nigeria is less restricted

Nigeria’s money transfer regulations

Bureaux de change are only authorised to offer person-to-person money transfer services in Nigeria, while corporate or institutional transactions must be executed by a bank or other financial institution. The Central Bank of Nigeria (CBN) issued new guidelines in September 2014 for incoming and outgoing money transfers executed by bureaux de change.

Incoming money transfers can be disbursed to the recipient’s bank account, mobile money accounts or via ATM. Recipients are permitted to immediately withdraw US$500 per transaction; however, any amount above this level must be paid into an account.

Nigeria’s regulatory authority

The CBN conducts national monetary policy, oversees the function of the financial system, works to maintain the country’s foreign exchange reserves and protects price stability. The naira floats freely, but the CBN loosely works to keep its value within a rough band of 155-160 naira to the US dollar, although it had risen over 165 per US$1 as of October 2014.

The CBN licenses foreign exchange businesses and issues regular circulars with forex guidelines. The CBN has liberalised its forex policies since 2002 in order to make foreign currency more readily available to money transfer businesses, which helped to increase the local forex supply. As of August 2014, the central bank counted 2,500 licensed bureaux de change in Nigeria.

Regional association

Nigeria is a member of the Economic Community of West African States (ECOWAS), a regional group that aims to foster economic and political cooperation among its fifteen West African members. It is also a founding member of the West African Monetary Zone (WAMZ), which was established in 2000 and now includes six ECOWAS countries: Nigeria, Ghana, Gambia, Guinea, Liberia and Sierra Leone. The WAMZ aims to introduce a common currency for these six states, the Eco, to rival the CFA franc, shared by eight other states in the region and is pegged to the euro. The ultimate stated goal is to merge the Eco with the CFA franc to create a single currency for West and Central Africa. However, with the 2015 goal of launching the Eco going to be missed, the prospects for merging with the franc are remote.

Opening a bank account in Nigeria

Foreign companies and individuals are permitted to hold forex-denominated accounts in domestic banks. There are no restrictions on the use of such accounts within Nigeria, and the funds may be repatriated freely.

Certain forex restrictions apply for travellers with naira-denominated accounts; individuals are permitted to withdraw a maximum of the equivalent of US$4,000 per quarter from naira accounts for personal travel, and up to US$5,000 per quarter for business travel. Both transactions may be executed either by bureaux de change or commercial banks.

Historic insufficient forex supply and slow bureaucratic procedures led to the development of a thriving parallel market - or black market - for currency exchange.

Nigeria’s economic background

Nigeria became Africa’s largest economy in 2013, thanks to strong oil production and several years of high global commodity prices. Nigeria is also the most populous country on the continent, with an estimated 170m people, and the largest recipient of foreign direct investment (FDI), which totalled US$7bn in 2012.

Currency

The naira (NGN), is indicated by the symbol ₦. One naira is equivalent to 100 cents, or kobo. The Central Bank of Nigeria issues banknotes in values of ₦5, ₦10, ₦20, ₦50, ₦100, ₦200, ₦500 and ₦1,000 naira. Coins are issued in values of 50 kobo, ₦1 and ₦2.

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