The Chief Executive Officer of 91 Payments, Pelumi Esho, a licensed International Money Transfer Operator, spoke with FELIX OLOYEDE about the Central Bank of Nigeria’s recent directive requiring IMTOs to settle remittance transactions in naira It is widely expected that the Central Bank of Nigeria’s directive mandating IMTOs to settle remittances in naira will enhance transparency and strengthen foreign exchange liquidity.
From your experience so far, how has this policy worked in practice, and how achievable do you think that outcome is? The CBN’s directive for IMTOs to settle remittances in naira is a highly positive step for market transparency, though its impact on broader FX liquidity is a bit more nuanced.
By bringing these flows into a single settlement account, regulators gain essential visibility on volumes and counterparties. This creates the clear audit trails that are fundamental to long-term market stability. However, it is important to clarify that this oversight will not necessarily result in an increase in total market liquidity across both official and unofficial channels combined.
Rather, we expect an increase in the volume passing specifically through the official window due to this heightened regulatory oversight. Yet, sustaining this official volume naturally depends on remittances remaining within these formal channels. In practice, customers are understandably price-sensitive.
While the regulatory focus on stability and visibility is crucial, everyday users tend to optimise for value. If official IMTO rates aren’t quite competitive with alternative channels, such as peer-to-peer networks, there is a risk that volumes could gradually migrate towards informal platforms.
So, while the liquidity picture might initially appear optically better, structural improvements require ongoing alignment with market realities. Enhancing transparency is an excellent foundation, but realising meaningful FX liquidity will ultimately depend on ensuring official rates remain competitive.
Where would you say the widest disconnect lies between the policy objectives and the practical realities faced by IMTOs? The biggest gap lies between the policy’s intent to reduce information asymmetry and the operational readiness of traditional banking infrastructure.
While the directive successfully improves transparency between banks and IMTOs, the reality is that an IMTO’s success heavily depends on rapid turnaround times and access to short-term liquidity. Historically, IMTOs relied on payment service providers because their platforms were purpose-built to execute quick remittances and bridge the funding gap between currency conversion and final payout.
As these flows migrate to the banks, the critical question is whether traditional banking infrastructure can match this agility. Are banks prepared to offer the same seamless reconciliation, rapid turnaround, and short-term liquidity provisioning that PSSPs provided?
Beyond infrastructure, another significant operational reality is the exchange rate dynamic itself. While the policy intends to securely capture more FX within the formal system, the actual volume of inflows is highly elastic to exchange rate parity. Because beneficiaries ultimately receive the naira equivalent, the value of that payout dictates user behaviour.