By the end of 2025, Nigeria was on course to receive between $23 billion and $26 billion in diaspora remittances — its highest projected total in five years. Makreo Research put the estimate at $23 billion; Agusto & Co projected as high as $26 billion. What is not in dispute is Nigeria's position as the largest remittance recipient in Sub-Saharan Africa, accounting for more than 35 per cent of the region's total flows.
On the surface, it is a story of resilience. Look closer, and a more complicated picture emerges.
The Headline vs. The Reality
The headline figure represents total flows, formal and informal combined. The formal channel data tells a sharper story. Nigeria experienced an 11.78 percent decline in IMTO remittance inflows in the first half of 2025, with total receipts falling to $2.07 billion from $2.34 billion in the same period of 2024, a shortfall of $275.93 million.
This came despite aggressive CBN reforms in 2024 that had produced a 44.5 percent surge in formal inflows to $4.76 billion. That momentum did not carry into 2025. So what happened, and where did the money go?
The Informal Channel Problem
Industry stakeholders point to inflationary pressures in advanced economies, tighter labour markets, tougher migration policies, and naira volatility as factors shifting flows toward informal channels.
That last point is the one most often glossed over. When the official rate lags the parallel market by even five percent, a sender in London is paying a premium to use a regulated platform. Over twelve months of monthly transfers, that premium is enough to make a WhatsApp arrangement look like the smarter financial decision.
The informal channel is not a failure of diaspora intent. It is a measurement of formal system inadequacy.
What the CBN's 2026 Reforms Signal
On March 24, 2026, the CBN issued a circular on Measures to Further Deepen Diaspora Remittances and Compliance, effective May 1, 2026, mandating designated settlement accounts, real-time pricing, and stricter compliance standards. The direction is correct. But regulation alone does not build a rail.
The Infrastructure Gap
We cannot say Nigeria's remittance challenge in 2025 was primarily a regulatory failure. It was an infrastructure gap dressed up as one.
Moving money from London to Lagos at a price that beats the informal channel requires FCA authorisation on the UK side, a licensed NIBSS connection on the Nigerian side, real-time FX settlement, and multi-currency account infrastructure that holds GBP and pays out NGN without a punishing forced conversion.
Diaspora remittances are Nigeria's second-largest foreign exchange source after oil, contributing 5 to 6 percent of GDP. The UK-Nigeria corridor still charges 3 to 5 percent in transfer fees, above the UN SDG target of 3 percent, and several multiples higher than what direct rail integration makes possible.
To put that in concrete terms: $23 billion at a 4 percent average cost generates $920 million in transfer fees annually, much of it absorbed by intermediaries. Compress that to 1 percent and $690 million flows back to Nigerian households. Not from new policy. Simply from infrastructure that stops extracting a premium for doing what it was built to do.
Three Infrastructure Priorities for 2026
What does direct rail integration mean for Nigeria's remittances? The operators that define the next five years will be the ones with licensed NIBSS connections, real-time FX settlement, and deep local payout integration, not the ones with the biggest marketing budgets.
Why does multi-corridor infrastructure matter more than single-market products? Nigeria's remittance basket is diversifying. The Canada-Nigeria corridor is maturing rapidly, driven by investment remittances and CAD to NGN commercial transfers from Nigeria's growing remote tech workforce. The Nigeria-India corridor is emerging. Operators building corridor-native infrastructure will capture these flows. Single-market products riding borrowed rails will not.
What is trust architecture in remittance infrastructure? Regulatory compliance is mandatory. What rebuilds sender trust is consistency: the same settlement speed in December as in July, rates that reflect the market, and a compliance process that is thorough without punishing legitimate senders.
Where Leatherback Sits in This
Leatherback is cross-border financial infrastructure: FCA-authorised in the UK, FINTRAC-registered in Canada, with licensed NIBSS connectivity in Nigeria, Interac integration in Canada, and settlement partnerships with Mastercard, Visa, and ClearBank.
For people in the diaspora, that means multi-currency accounts without forced conversion and settlement at market rates. For SMBs, MTOs, and financial institution partners, the CBN's May 2026 compliance directive makes the case plainly: informal infrastructure is becoming structurally untenable. The window for migrating to licensed, regulated rails is now.
The Number That Matters in 2026
Total inflows will likely grow. Diaspora income is rising. Digital adoption is compounding. The CBN's new framework will push more flows through channels that show up in the data.
But the number worth tracking is not how much flows. It is how much arrives whole — at a cost that reflects the actual cost of moving money, not decades of infrastructure underinvestment priced into every transfer.
That is the promise of corridor-native financial infrastructure. In 2026, it is no longer a promise deferred.
Leatherback is cross-border financial infrastructure for businesses, MTOs, and financial institutions across Africa, the UK, and Canada. FCA-authorised. FINTRAC-registered.
Learn more at leatherback.co
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