IMTOs inflows decline raises fresh concerns for Nigeria’s FX market
Nigeria’s external revenue profile came under renewed scrutiny in the first half of 2025 as fresh figures from the Central Bank of Nigeria revealed a notable downturn in IMTOs inflows, signalling persistent pressure on one of the country’s most strategic non-oil foreign exchange sources.
The latest Quarterly Statistical Bulletin published by the apex bank shows that IMTOs inflows totalled $2.07bn between January and June 2025, representing an 11.78 per cent decline from the $2.34bn recorded in the corresponding period of 2024.
The year-on-year contraction amounts to an estimated $275.93m shortfall and underscores broader headwinds confronting remittance channels at a time policymakers are banking on IMTOs inflows to deepen liquidity in the foreign exchange market and stabilise macroeconomic fundamentals.
Analysts note that remittances through IMTO platforms remain critical to household consumption, investment flows, and FX supply, making the downward trend a development of significant policy interest.
A review of the monthly data indicates that the performance of IMTOs inflows was uneven across the six-month period, with five of the months recording declines and only one posting a rebound.
In January 2025, IMTOs inflows fell sharply to $281.97m from $390.86m in January 2024, reflecting a 27.86 per cent contraction. The negative trajectory continued in February, where inflows dipped to $288.82m from $326.91m a year earlier.
The weakening pattern persisted in March as IMTOs inflows dropped to $317.60m, down from $363.76m in March 2024, indicating a 12.69 per cent decline.
However, the trend briefly reversed in April when IMTOs inflows rose markedly to $597.44m from $466.11m recorded in April of the previous year.
The April rebound represented a 28.18 per cent increase and stood out as the strongest performance in the reporting period.
Despite the exceptional April surge, the momentum was not sustained.
In May 2025, IMTOs inflows slipped again to $288.17m compared with $404.75m in May 2024, signalling a 28.80 per cent decline.
June followed a similar pattern, with IMTOs inflows falling to $292.25m from $389.79m in June 2024, translating to a decline of 25.02 per cent.
Although the April spike moderated the half-year losses, it was insufficient to offset the declines recorded across the remaining five months.
The volatility in IMTOs inflows has reignited conversations around the sensitivity of remittance channels to domestic economic pressures, global financial conditions, currency expectations, and household purchasing power across diaspora communities.
Remittances routed through IMTO platforms have become increasingly important in Nigeria’s post-oil diversification efforts.
Beyond foreign exchange support, IMTOs inflows contribute significantly to family income support, small-scale investment, and financial inclusion.
For many households, particularly in urban and peri-urban communities, diaspora remittances continue to serve as an economic lifeline during periods of inflationary pressure and rising living costs.
Sector observers suggest that fluctuations in exchange rates, the widening gap between official and parallel markets earlier in the year, as well as global inflation trends, may have influenced remittance behaviour.
Although the CBN bulletin did not specify the underlying drivers of the decline in IMTOs inflows, the pattern highlights the fragility of current remittance dynamics and the need for sustained confidence-building measures.
The decline in IMTOs inflows comes against the backdrop of sweeping foreign exchange and regulatory reforms introduced by the Central Bank in the past two years.
In 2024, the apex bank removed the pricing cap previously imposed on IMTO exchange rate quotations and introduced new licensing rules, including an increase in the IMTO licence application fee from N500,000 to N10m and a minimum operating capital threshold of $1m for both domestic and international operators.
The Central Bank also lifted earlier restrictions preventing IMTOs from accessing the domestic FX market and later established a Collaborative Task Force, reporting directly to the CBN Governor, Olayemi Cardoso, with a mandate to deepen competition, improve transaction transparency, and attract more diaspora participation into formal remittance channels.
In further support of this agenda, the CBN issued 14 new Approval-in-Principle licences to IMTOs in 2025, a development expected to widen market participation and enhance remittance-driven FX supply.
These reforms were credited with boosting IMTOs inflows in 2024, when Nigeria witnessed a significant resurgence in recorded remittances.
However, despite these interventions, the latest data shows that the growth momentum has not fully translated into sustained gains in 2025.
The uneven flow of IMTOs inflows suggests that the remittance ecosystem remains exposed to evolving economic conditions and changing incentives across sender markets.
Stakeholders argue that deepening trust, improving transaction convenience, and narrowing informal transfer leakages remain crucial for strengthening IMTOs inflows in the medium term.
Others have called for closer engagement with diaspora communities and the rollout of structured investment-linked remittance products to encourage higher participation through formal channels.
As monetary authorities continue efforts to stabilise the naira and expand non-oil foreign exchange earnings, the latest trend in IMTOs inflows will likely remain a key indicator of policy impact and market confidence in the period ahead.
