Nigeria - Country Commercial Guide
Trade Financing

It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking.

Last published date: 2021-10-13

Methods of Payment

Methods of payment include confirmed irrevocable letters of credit, bills for collection, open accounts, or any other internationally accepted mode of payment. Note that imports on open account basis are not guaranteed by GON. Whatever the form of payment adopted, the proceeds must be repatriated within 90 days from the date of shipment of the consignment. U.S. exporters are advised to ship goods only on sight of confirmed and irrevocable letters of credit.  The advisable method of quoting is “CIF.” U.S. firms also are advised that fraudulent business practices involving forged financial documents are common.  Independent verification of the legitimacy of transactions is recommended.  U.S. exporters should also consult with their bankers for document verification.  It is necessary to confirm the validity of any Nigerian bank with the U.S. Commercial Service office in Nigeria.

Credit rating agencies approved by Nigeria’s Securities and Exchange Commission (SEC) include:

Augusto and Co.

Datapro Limited

Global Credit Rating 

Some of these agencies also offer debt collection services. American companies should contact the U.S. Commercial Service for assistance with a list of vetted collection agents. Visa and Mastercard are the widely used cards in Nigeria for payments. The American Express card is also accepted but is not common.

Banking System

The Nigerian banking system currently consists of 22 commercial banks, 942 micro-finance banks, 5 discount houses, 64 finance companies, and 6 development finance banks.  The Central Bank of Nigeria (CBN) regulates and supervises the activities of these and others categorized as “other financial institutions”. These include bureaus de change (BDCs), finance companies (FCs), primary mortgage institutions (PMIs) and FinTech companies.  The CBN is primarily responsible for formulating policies and monitoring the financial system to ensure that operators comply with monetary, credit, and foreign exchange guidelines.  Nigerian commercial banks perform three major functions: accepting deposits, granting loans, and operating payment and settlement mechanisms. 

The launch of CBN’s Payment Systems Vision 2020 (PSV 2020) in 2007 led to a sharp increase in the number of new FinTech companies operating in Nigeria. Most of them offer mobile lending, mobile/electronic payments, and personal finance solutions. The CBN has not yet crafted any regulations specifically for FinTech, a situation that creates ambiguity and complications on several issues but oversees the industry under the bank’s “Guidelines for Licensing and Regulation of Payment Service Banks (PSB) 2018.” 

Foreign Exchange Controls

Nigeria operates a system of multiple exchange rates. These include an interbank rate (where banks lend to each other), another used by international money transfer companies, an Importers and Exporters (I&E) Window established in April 2017, and a black-market rate. The CBN eliminated the official exchange rate in May 2021, making a step toward unifying the multiple exchange rate regime.  The International Monetary Fund (IMF) has been critical, noting that the absence of a single exchange rate creates confusion and deters foreign investments. In late 2015, the bank pegged the local currency at roughly 200 naira against the dollar until June 2016 when collapsing oil prices put downward pressure on the naira, forcing the bank to devalue it to about 305 naira to the dollar and introduced measures to save it from sliding further.  Some of these measures included barring importers of more than 40 product categories from accessing dollars from the CBN, restricting the amount of dollars drawn daily from foreign ATMs by Nigerians when they travel overseas, reducing dollar amounts the bank sold weekly to bureau-de-change operators, stopping sale of dollars to Nigerian students studying abroad, and making the bank the exclusive conduit for all foreign capital inflows into the country.

The gulf between the official and unofficial exchange rates has continued to widen. As of October 2021, the black-market rate was approximately 565 naira to the dollar. In contrast, the rate listed on the CBN website was near 409 naira to the dollar for much of October.

Boosted by a growing foreign reserve pot, the CBN relaxed some of these forex policies and injected the much-needed dollars into the system, leading to relative stability in the market until March 2020 when the COVID-19 pandemic and a sharp drop in international oil prices led to a significant decline in the value of the naira. Commercial banks are reducing international spending limits by their customers abroad amid the country’s fragile currency situation. Local businesses still experience difficulties buying foreign currency and processing offshore payments due to the existing forex regime.

To encourage foreign investments in Nigeria, the government has, in theory, removed all barriers to repatriation of capital, profits, and dividends.  Repatriation of proceeds from disposal of assets is allowed.  Subject to payment of relevant taxes, investors are guaranteed unrestricted return of their investment capital and proceeds, in any convertible currency, if that capital was brought into Nigeria under a Certificate of Capital Importation (CCI). However, for the reasons stated above, CBN’s effort to defend the naira has fettered the ease with which foreign monies can now be repatriated from Nigeria. Overall, U.S. companies are encouraged to consult their Nigerian bankers for proper advice with respect to foreign exchange dealings.

U.S. Banks & Local Correspondent Banks

Citibank and JP Morgan are the only U.S. banks with a presence in Nigeria.  However, United Bank of Africa (UBA) and Standard Chartered Bank both operate branches in the United States.  Most Nigerian banks have correspondent relationships with U.S. banks.


Commerce House

27 Kofo Abayomi Street

Victoria Island, Lagos


P.O. Box 6391, Lagos

Tel: (234‑1) 279- 8400 or 463- 8400

Fax: (234‑1) 270-1191


J.P. Morgan

The Waterfront

Plot 5, Oyinkan Abayomi Drive, Ikoyi

Lagos, Nigeria

Tel: 234-1271 -8736 

Fax: 234-1-271-8737


United Bank for Africa

UBA House          
57 Marina, Lagos


P.O. Box 2406, Lagos        
Tel: 234-1-264-4651-700                                                    

Standard Chartered Bank

142 Ahmadu Bello Way

Victoria Island, Lagos


Tel: 234-1-270-0025

Fax: 234-1-270-2144