Nigeria’s diaspora remittance inflows through formal channels rose 38.16 per cent to $2.85 billion in the first half of 2026, but sustaining the recovery will depend on foreign exchange stability, lower transfer costs, and greater confidence in official payment systems, Cowry Asset Management said.

The firm said the Central Bank of Nigeria’s (CBN) target of attracting $1 billion in monthly remittances provides a benchmark for measuring progress, but achieving it consistently would require reforms that make official channels more accessible and competitive.

Cowry Asset Management’s outlook followed a 38.16 per cent year-on-year increase in remittance inflows through International Money Transfer Operators (IMTOs) to $2.85 billion in the first half of 2026, from $2.07 billion in the corresponding period of 2025.

The $788.5 million increase marks the highest first-half inflow in the seven-year series, reversing the 11.78 per cent decline in the first half of 2025, when inflows fell from $2.34 billion in the corresponding period of 2024.

Since 2019, first-half remittance inflows have risen by about 160 per cent from $1.1 billion, highlighting the growing importance of funds sent home by Nigerians living abroad.

Monthly data showed that June recorded the highest inflow of $580.16 million, followed by April at $513.82 million and January at $507.91 million. March recorded the lowest inflow at $378.27 million.

According to Cowry Asset Management, foreign exchange reforms have made formal remittance channels more attractive by narrowing the gap between official and parallel-market exchange rates, reducing the incentive to use informal channels that offer more favourable conversion rates.

The CBN has also attributed the improvement to the willing-buyer, willing-seller foreign exchange regime and the expansion of licensed IMTOs. Approvals for additional operators are expected to deepen competition, improve access and reduce transaction costs.

Measures allowing eligible IMTOs to access naira liquidity through authorised dealer banks or directly through the CBN have also supported participation in the formal market. The provision for same-day settlement of eligible transactions executed before noon is intended to improve operational efficiency.

The introduction of designated naira settlement accounts, effective May 1, 2026, is another part of the reform programme. Under the framework, IMTOs must route transactions through designated accounts at authorised dealer banks, while beneficiaries receive payments in naira. The arrangement is designed to strengthen transparency, traceability and regulatory monitoring.

The Non-Resident Bank Verification Number (NRBVN), which allows eligible Nigerians abroad to complete verification remotely, is also expected to reduce administrative barriers to accessing domestic financial services.

However, the firm cautioned that higher recorded inflows through IMTOs do not necessarily mean that total diaspora transfers have increased by the same amount.

The CBN’s balance of payments data showed that personal transfers reached $11.12 billion in the first half of 2026, a broader measure than the $2.85 billion captured through IMTOs. This suggests that some of the increase may reflect transfers moving from informal channels into regulated systems rather than entirely new foreign currency inflows.

Cowry Asset Management said the shift to formal channels improves oversight and transparency, but the contribution of remittances to additional foreign exchange supply will depend on how the funds are converted and deployed.

The increase has coincided with relative naira stability and stronger external reserves. The naira stood at about N1, 334.40 per dollar, while reserves reportedly rose 21 per cent year-to-date to $55.10 billion.

Although these developments point to improved external buffers, the firm noted that oil receipts, capital flows, trade balances, and foreign exchange demand also influence the naira and reserve accumulation.