Licensed currency traders say International Money Transfer Operators (IMTOs) are no longer diverting forex proceeds, especially diaspora remittances, outside the official system.
They attribute this to the elimination of profit margins that previously made such diversions attractive.
This shift, they argue, is one of the reasons behind the recent appreciation of the naira and relative stability in the foreign exchange market.
They also point to stronger oil inflows, rising diaspora remittances, renewed foreign investor confidence, and tighter CBN oversight as additional stabilizing factors.
IMTOs are companies approved by the Central Bank of Nigeria (CBN) to facilitate transfers from Nigerians abroad to beneficiaries at home.
For years, Bureau de Change (BDC) operators accused some IMTOs of diverting remittances through unofficial channels, often via fintechs and unlicensed online firms willing to pay higher rates.
Former acting CBN Governor Folashodun Shonubi also linked naira weakness to the diversion of remittances away from official markets.
At the time, it was estimated that only a fraction of inflows reached the CBN’s reserves. For instance, Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, disclosed that just 10% of the $20 billion remitted in 2023 entered Nigeria’s forex market.
The World Bank reported Nigeria received about $21 billion in diaspora remittances in 2023 through official channels nearly four times the country’s foreign direct investment for the year. World Bank data is thought to includes items other than cash.
However, comments from central bank officials indicate forex inflows international money transfer operators now average $600 million monthly. They have targeted $1 billion monthly from 2026.
According to traders, those arbitrage opportunities have largely disappeared. The spread between the official and parallel markets, once as wide as N50–N100, has narrowed sharply. In some cases, the parallel market has even traded below the official rate.
This shift has reduced speculative activity and hoarding, while also removing the incentive for IMTOs to divert remittances.
Gwadebe told Naijaonpoint that the willing-buyer, willing-seller model has made the market more transparent.
Not all traders are convinced the problem is solved. Abu Ardo, another BDC operator, argued that some IMTOs still quietly divert part of their inflows.
Still, Ardo acknowledged that broader supply dynamics have supported the naira in recent months.
He cautioned, however, that stability is fragile.
He cautioned, however, that stability is fragile.
To improve transparency, the CBN issued new guidelines for IMTOs in January 2024. These reforms:
The apex bank also granted new IMTO licenses while tightening oversight to curb diversion. BDC operators, meanwhile, continue to push for access to diaspora remittances and approval for online dollar operations to deepen market liquidity.
For now, traders say the forces supporting the naira, higher oil inflows, stronger remittances, reduced speculation, and CBN reforms, remain intact.
But they caution that sustaining stability will require consistent policy, disciplined supply management, and continued investor confidence.