New CBN Measures on Diaspora Remittances: What They Mean for Market Participants

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BY ADERONKE ALEX-ADEDIPE AND PROMISE ITAH

Introduction

On March 24, 2026, the Central Bank of Nigeria (CBN) issued a circular on Measures to Further Deepen Diaspora Remittances and Compliance (the “Circular”). The Circular, which is effective from May 1, 2026, builds on the CBN’s revised guidelines for international money transfer services in Nigeria, and is aimed at enhancing  diaspora remittances, strengthening transparency, traceability, and effective monitoring of all remittance related transactions.

In this newsletter, we highlight the measures introduced by the CBN and assess their practical implications for participants.

What Are the New Measures?

The following measures have been prescribed by the CBN.

  1. Designated Naira Settlement Accounts: All transactions related to International Money Transfer Operators’ (IMTO) operations, including payments to beneficiaries and any settlements, must be processed through designated settlement accounts held with authorised dealer banks (ADBs or Banks). IMTOs may either open new accounts or use existing ones for this purpose and can maintain multiple naira settlement accounts based on their business needs. However, they are required to regularly provide the CBN with an updated list of these designated accounts through the Director of the Trade and Exchange Department.
  2. Account Funding Restrictions: The circular makes it clear that these settlement accounts can only receive money from remittances or foreign exchange transactions carried out by the IMTOs or their agents through authorized participants in the Nigerian Foreign Exchange Market (NFEM). This means that no other funds are allowed to be deposited into these accounts.
  3. Authorised Transfers to Other Market Participants and BDCs: To improve the flow of foreign exchange and support fair pricing, ADBs are permitted to process foreign currency transfers from IMTO settlement accounts to other ADBs and approved market participants, including licensed Bureau de Change (BDC) operators.
  4. Real-Time FX Pricing: IMTOs must set their remittance rates to reflect current market prices from Bloomberg’s BMatch platform rather than being set independently. By doing this, the CBN aims to ensure more accurate pricing, reduce information gaps between banks and IMTOs, and encourage greater use of the official FX market.
  5. Compliance and Record Keeping: In addition to complying with the above measures, all IMTOs (and ADBs) must strictly comply with anti‐money laundering and counter-terrorism financing rules. Detailed records of all remittance transactions (origins, amounts, beneficiaries, conversions, etc.) must also be kept for regulatory review and audit purposes.

 

What Are the Practical Implications?

The new measures may require certain operational changes. We have set out below, some key implications and action points for IMTOs, banks, BDCs and other stakeholders:

  1. IMTOs (Money Transfer Operators):

    In view of the above regulatory measures, IMTOs may require system upgrades and staff training and must also strengthen record-keeping and AML/KYC processes, maintaining detailed transaction logs for regulatory review.

  2. ADBs (Commercial Banks):

    ADBs should prepare for increased demand from IMTOs to open and manage multiple naira settlement accounts and streamline onboarding processes accordingly. Banks will also need to closely monitor these accounts to ensure they are used solely for remittance flows and comply with FX funding requirements, while supporting IMTOs in meeting AML/CFT obligations.

  3. BDCs:

    Since ADBs are permitted to process foreign currency transfers from IMTO settlement accounts, BDCs may engage ADBs and their IMTO partners to access this FX liquidity.

  4. General Market Effects:

    In general, the measures are expected to improve transparency by channeling remittance flows through the formal banking system, giving the CBN greater visibility into FX inflows. In the medium term, it is expected that this will reduce reliance on informal markets, support better rate alignment, and contribute to improved liquidity and stability in the FX market.

Conclusion

The CBN’s new measures on diaspora remittances are part of a series of significant steps toward formalising diaspora remittance flows and improving transparency in Nigeria’s foreign exchange market. By mandating designated settlement accounts, real-time pricing, and stricter compliance standards, the framework is expected to enhance liquidity, strengthen regulatory oversight, and reduce reliance on informal channels. While stakeholders will need to adjust their operations to meet the new requirements, the CBN expects that the reforms should, over time, support better price discovery and contribute to greater stability of the naira.

NIGERIA–UNITED KINGDOM STATE VISIT – LEGAL AND REGULATORY IMPLICATIONS FOR CROSS-BORDER INVESTMENT

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By Seun Timi-Koleolu and Eniola Sogbesan

Introduction

The recent State visit by President Bola Ahmed Tinubu to the United Kingdom on March 18, 2026 marks a significant moment in the evolution of Nigeria–UK relations, being the first such visit in nearly four decades. While the visit carried considerable diplomatic weight, its true import lies in the legal, regulatory, and commercial signals it sends to investors, and multinational operators engaged in cross-border transactions between both jurisdictions.

At the heart of this visit was the renewed commitment to the Enhanced Trade and Investment Partnership (ETIP). This cooperation framework is designed to facilitate dialogue, harmonize legal standards, and provide a secure environment for cross-border capital flow. For Nigerian businesses, the ETIP presents a new opportunity which demands a deep understanding of international trade law, intellectual property rights, and bilateral investment treaties.

This newsletter examines the practical legal and business implications of the visit, with a focus on investment structuring, regulatory alignment, emerging opportunities and how Nigerian businesses can strategically position to benefit.

Legal and Business Implications

  1. Renewed Bilateral Frameworks and Investor Confidence

A central takeaway from the visit is the renewed commitment to deepening economic cooperation under existing bilateral frameworks, particularly the ETIP. The  ETIP functions as a policy coordination framework facilitating regulatory dialogue, market access initiatives and investment promotion efforts.

For investors, this represents a more predictable policy environment, which is critical in jurisdictions where regulatory uncertainty has been a concern. This is expected to drive incremental regulatory reforms and administrative alignment in both jurisdictions, particularly in sectors prioritized for UK–Nigeria collaboration such as infrastructure, finance, energy, and technology.

  1. Infrastructure Investment and Financing Structures

One of the most concrete outcomes of the State visit was the announcement of a £746 million investment by the UK in the Nigerian ports. Although the full transaction documentation is not yet public, the structure is likely to involve; Export Credit Agency (ECA) support, Sovereign or quasi-sovereign guarantees and Public–Private Partnership (PPP) frameworks.

  1. Regulatory Alignment and Market Access

The visit highlights a broader effort to reduce friction in cross-border trade and investment flows. While Nigeria and the UK operate fundamentally different regulatory systems, ongoing engagement within the ETIP framework may drive improved customs processes, greater transparency in licensing and approvals and enhanced cooperation between regulatory agencies

In the coming months, Nigeria businesses should closely monitor sector-specific regulatory developments, as reforms may be implemented through subordinate legislation, guidelines, or administrative action, rather than primary statutes.

  1. Dispute Resolution and Legal Risk Management

Cross-border investments inevitably raise questions around dispute resolution mechanisms. While the visit did not produce a new bilateral investment treaty, the strengthening of relations may encourage a greater reliance on international arbitration and more robust contractual protections against regulatory changes.

 

While Nigeria remains a signatory to key international arbitration conventions, and its courts have shown increasing willingness to uphold arbitral awards, enforcement timelines can still present challenges. Therefore, investors should prioritize carefully drafting the dispute resolution clauses in key cross-border transaction documentation.

 

Strategic Opportunities for Nigerian Businesses

While much focus is typically placed on inbound foreign investment, the outcomes of the State visit present significant opportunities for Nigerian businesses to actively participate and benefit from the ETIP. Some of these opportunities include;

  1. opportunities for Public Private Partnership projects and Infrastructure Value Chains;
  2. enhanced corporate governance and compliance standards;
  3. access to financing and investment partnerships;
  4. structuring for cross-border expansion and
  5. increased access to trade and export opportunities.

Conclusion

While the visit has set a strong diplomatic tone, the true test will lie not in policy articulation, but in execution—creating a critical window for investors and Nigerian businesses to position early and strategically under the ETIP.

For foreign investors and Nigerian businesses, the key takeaways are clear:

  1. a more structured and coordinated investment environment is emerging;
  2. infrastructure and trade-related sectors present immediate opportunities and
  3. legal and regulatory diligence remains critical to successful market entry and participation

Ultimately, Nigerian businesses that proactively align with these global standards, build strategic public-private partnerships, and position within emerging value chains will be best placed to capture value from this renewed bilateral engagement.

SAFE VS. CONVERTIBLE NOTES: NAVIGATING FINANCING OPTIONS IN NIGERIA

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BY ADERONKE ALEX-ADEDIPE AND HILLARY OKOROTIE

Introduction

Financing is an important component of every company’s formation and growth. For early-stage companies, founders often face the important decision of selecting the investment model that best supports the company’s development. While there are several financing options available such as direct equity investments and debt financing, this newsletter focuses on Simple Agreements for Future Equity (SAFEs) and Convertible Notes.

Understanding the differences between SAFEs and Convertible Notes is essential for investors and founders seeking to balance risk and growth opportunities in early-stage financing.

 

Understanding a SAFE

Introduced by Y Combinator in 2013, a SAFE is a contractual instrument through which an investor provides funding in exchange for the right to receive equity at a later date and upon the occurrence of a specified triggering event. Under a SAFE, the investor’s return is realized when the company undergoes a liquidity-triggering event. These triggering events are usually defined in the agreement and may include events such as a merger, acquisition, an initial public offering (IPO), a change of control, etc.

SAFEs can be structured in several ways depending on the terms negotiated. The common structures include: (i) a discount, no valuation SAFE, where the investor converts their investment into equity at a discounted price compared to new investors in a future financing round; (ii) a valuation cap, no discount SAFE, which sets a maximum company valuation at which the investment will convert into equity; (iii) a valuation cap and discount SAFE, combining both protections for the investor; and (iv) a Most Favoured Nation (MFN) SAFE, which contains neither a discount nor a valuation cap but allows the investor to adopt more favourable terms offered to future SAFE investors. For more details, please read our newsletter here.

 

Understanding Convertible Notes

Convertible Notes represent a more traditional approach to early-stage financing. Structurally, they are debt instruments that convert into equity or repayment. When an investor provides funds through a Convertible Note, the company is technically borrowing money. The note includes a principal amount, an interest rate, and a maturity date. It is designed to convert into equity or repayment upon maturity.

This structure means that Convertible Notes begin as debt obligations but transform into ownership stakes when a qualifying financing event occurs. Interest accrued over time is usually added to the principal amount before conversion. The maturity date also introduces an additional layer of protection for investors to recoup their investments.

 

Distinction Between SAFEs and Convertible Notes

The most fundamental distinction between SAFEs and Convertible Notes lies in their classification. A SAFE is not a debt instrument, rather, it represents a contractual right for an investor to receive equity in the company in the future upon the occurrence of specified triggering events. As a result, a SAFE does not create an obligation for the company to repay the invested funds and does not accrue interest over time.

Convertible Notes, by contrast, are debt instruments that are designed to convert into equity at a later stage. When funds are provided through a Convertible Note, the company owes the investor the capital sum until the note converts or is repaid. Prior to conversion, the investment typically accrues interest and is subject to a fixed maturity date. At maturity, the principal and any accrued interest may convert into equity depending on the terms of the agreement. These features generally provide investors with additional protection and leverage, while SAFEs tend to offer companies flexibility and no immediate financial obligations.

 

Conclusion

As Nigeria’s startup ecosystem continues to expand, founders and investors will increasingly encounter alternative financing instruments when raising capital. SAFEs and Convertible Notes both serve this purpose, providing an avenue through which companies can secure funding at the early stages of growth.

Choosing between the two often depends on the growth objectives of the company and the level of protection investors seek. Regardless of the structure adopted, obtaining professional legal advice and maintaining a clear understanding of the conversion mechanics are essential to ensuring that both founders and investors are adequately protected.

NIGERIA TRADE REGULATORY UPDATE: NATIONAL SINGLE WINDOW PLATFORM LAUNCH AND IMPORT RESTRICTIONS

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By Seun Timi-Koleolu and Omodele Fatodu

Introduction

Nigeria’s trade regulatory landscape has recently seen developments aimed at improving trade administration and strengthening import controls. In particular, the Federal Government has announced the launch of the National Single Window Platform (the “Platform”), a digital system designed to streamline import and export processes, while also announcing a ban on items prohibited from importation into Nigeria in 2026.

These developments form part of broader government efforts to modernise Nigeria’s trade infrastructure, enhance border control mechanisms, and promote local production.

1. National Single Window Platform

The Federal Government is set to launch the Platform on 27 March 2026 as a centralised electronic portal for the processing of trade-related documentation. The Platform is intended to allow importers and exporters to submit trade information through a single interface, which will then be automatically shared with the relevant government agencies for processing.

Nigeria has previously explored the introduction of a national single window system as part of broader trade facilitation reforms, with earlier initiatives dating back to the late 2000s. However, those efforts did not result in a fully integrated system. While aspects of Nigeria’s trade administration have been digitised through platforms such as the Nigeria Trade Portal, which provides information on import and export procedures and serves as an access point to certain trade related processes, regulatory approvals and trade documentation have historically been administered across multiple agency systems. For example, importers typically process a Form M (a mandatory import declaration form) through an authorised dealer bank, submit cargo documentation to the Nigeria Customs Service (“NCS”), and obtain product specific approvals or certifications from regulators such as the Standards Organisation of Nigeria (“SON”) and the National Agency for Food and Drug Administration and Control (“NAFDAC”).

The Platform is intended to address this fragmentation by enabling traders to submit trade data through a single electronic interface which can then be shared automatically among participating government agencies. It is expected to integrate several regulatory bodies within Nigeria’s trade ecosystem, including the NCS, SON, and NAFDAC. Through the Platform, traders will be able to submit documentation once, rather than interacting separately with multiple agencies. This approach is expected to reduce duplication of documentation requirements and facilitate greater coordination among regulatory authorities responsible for customs clearance, permits, and trade approvals.

Implementation of the Platform is expected to occur in phases. The initial rollout will focus on the online processing of import permits, electronic submission of cargo manifests, and a centralised risk management system. Subsequent phases are expected to incorporate additional trade processes, including export documentation and full system integration.

2. Federal Government Import Prohibition List

The Federal Government has also recently released a list of goods prohibited from being imported into Nigeria. The 2026 import prohibition list (the “Prohibition List”) covers a range of items across agricultural products, household goods, and manufactured items. By restricting the importation of certain products, the government aims to support domestic manufacturing capacity and reduce Nigeria’s reliance on imported consumer goods in specific sectors.

It is important to distinguish the Prohibition List from the foreign exchange restrictions previously imposed on certain imported goods which was lifted by the Central Bank of Nigeria (“CBN”) in October 2023. The Prohibition List imposes a ban on certain items into Nigeria while the former foreign exchange restrictions barred access to official foreign exchange for the importation of specified items.

Examples of items included in the Prohibition List include:

i. Frozen poultry products

ii. Used motor vehicles older than twelve years from the year of manufacture

iii. Spaghetti and noodles

iv. Fruit juice in retail packs

v. Bagged cement

vi.Certain pharmaceutical products such as paracetamol, chloroquine, and metronidazole

Importation of goods that fall within the prohibited categories is not permitted and can result in enforcement actions by customs authorities, including the immediate seizure and destruction of goods, legal action, and the imposition of applicable penalties.

Conclusion

Nigeria’s ongoing trade policy reforms reflect an effort to balance trade facilitation with regulatory oversight. The upcoming launch of the National Single Window Platform represents an important step toward modernising Nigeria’s trade administration through the digital integration of regulatory agencies.

For importers, exporters, and logistics operators, the Platform may improve the efficiency of documentation processes and potentially reduce administrative delays associated with multi-agency approvals. Over time, the system could contribute to more streamlined customs clearance procedures and improved transparency in trade administration.

At the same time, the updated import prohibition list serves as a mechanism for regulating imports and supporting domestic economic policy objectives. Businesses involved in international trade and distribution activities should ensure that internal compliance processes include verification of import eligibility under Nigerian customs regulations.