Nigeria’s remittance receipts through formal channels declined sharply in the first six months of 2025, falling nearly 12% compared to the same period last year, according to data released by the Central Bank of Nigeria (CBN).
Official figures from the apex bank’s quarterly statistical bulletin show that International Money Transfer Operators (IMTOs) channeled $2.07 billion into Africa’s largest economy between January and June 2025, down from $2.34 billion recorded during the corresponding period in 2024. The decline represents a shortfall of $275.93 million, or 11.78%, year-on-year.
The drop comes as a setback to policymakers who have introduced a series of foreign-exchange market reforms aimed at strengthening inflows and stabilizing the naira. Remittances from Nigerians abroad have long served as a critical source of dollar liquidity, supporting millions of households and buttressing the country’s external reserves position.
A closer examination of the data reveals that the damage was concentrated in the opening quarter of the year. Between January and March 2025, IMTO receipts totaled just $888.39 million, a steep 17.9% decline from the $1.08 billion received in the first quarter of 2024.
January proved to be the weakest month on record, with inflows plummeting 27.8% to $281.97 million, compared to $390.86 million in the same month a year earlier. February saw an 11.6% decline to $288.82 million, while March receipts fell 12.7% to $317.60 million.
The sustained weakness in the first quarter has raised questions about the effectiveness of recent policy interventions, including the CBN’s engagement with major remittance operators and efforts to incentivize the use of formal channels over parallel market routes.
The second quarter presented a more mixed picture. Overall IMTO inflows for April through June totaled $1.18 billion, representing a more modest 6.6% decline from the $1.26 billion recorded in the same quarter of 2024.
April 2025 emerged as a notable outlier, with receipts surging 28.2% to $597.44 million from $466.11 million the previous year. The unexpected jump provided temporary relief, preventing the half-year decline from deepening further.
However, the momentum proved short-lived. May inflows collapsed 28.8% to $288.17 million from $404.75 million, while June recorded a 25% drop to $292.25 million, down from $389.79 million in June 2024.
Analysts remain divided on what drove the April spike. Some attribute it to seasonal factors or delayed transfers from the first quarter, while others point to possible improvements in exchange rate transparency during that period.
The continued weakness in formal remittance channels carries significant implications for Nigeria’s macroeconomic stability. Diaspora remittances have historically exceeded foreign direct investment and represent a vital cushion for the country’s balance of payments.
With Nigeria’s foreign reserves under pressure and the naira experiencing volatility, any sustained reduction in remittance inflows compounds the challenges facing monetary authorities. Household consumption, particularly in regions heavily dependent on diaspora support, may also face headwinds if the trend persists.
The CBN has not issued an official statement on the latest figures, but industry observers suggest the decline may reflect a combination of factors, including continued use of informal channels, economic conditions in key diaspora markets, and lingering trust issues with the formal financial system.
As Nigeria heads into the second half of 2025, the authorities face renewed urgency to reverse the remittance slide and restore confidence in official transfer channels—a task that may prove critical to broader efforts at economic stabilization.
WHAT YOU SHOULD KNOW
Nigeria’s formal remittance inflows dropped nearly 12% in the first half of 2025, falling to $2.07 billion from $2.34 billion year-over-year—a $276 million shortfall that threatens the country’s already strained foreign exchange position.
The decline was sharpest in the first quarter, with January alone seeing a 28% plunge. While April brought an unexpected 28% surge, it proved temporary as May and June resumed steep declines.
This weakening of diaspora flows, traditionally a critical source of dollar liquidity for Nigeria, raises serious concerns about household consumption and the country’s ability to stabilize the naira, suggesting that recent foreign-exchange reforms have yet to rebuild confidence in formal remittance channels.
