Nigeria Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in nigeria, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Trade Financing
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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 an open account basis are not guaranteed by the Nigerian government. 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 not as widely.

For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.

Banking System

The Nigerian banking system currently consists of 25 commercial banks, 720 micro-finance banks, 107 finance companies, and six development finance institutions. The Central Bank of Nigeria (CBN) regulates and supervises the activities of these and “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 monetary policies and monitoring the financial system, providing guidelines in areas such as credit and foreign exchange. Nigerian commercial banks perform three major functions: accepting deposits, granting loans, and operating payment and settlement mechanisms.  

In March 2024, the CBN released new guidelines on the minimum capital requirement for banks operating in Nigeria. This ranges from $32 million to $320 million depending on the type of license held by the bank. The Nigerian FinTech Industry has experienced exponential growth in recent years and accounts for one third of the African Fintech market.  There is no single regulatory authority assigned to oversee Fintech. The regulators cut across various other sectors and include, the Central Bank of Nigeria (CBN), the Nigerian Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the Nigerian Communications Commission (NCC), the National Information Technology Agency (NITDA), the National Insurance Commission (NAICOM), the Federal Competition and Consumer Protection Commission (FCCPC), the Corporate Affairs Commission (CAC), the Federal Inland Revenue Service (FIRS), the Nigeria Data Protection Commission (NDPC) and the National Office for Technology Acquisition and Promotion (NOTAP). The extent of each regulator’s supervision mostly depends on the transactions or services offered by a Fintech company.

Foreign Exchange Controls

For many years, Nigeria operated multiple exchange rates under the “official market” determined by the CBN and a parallel market largely controlled by Bureau de Change operators. In June 2023, the CBN abolished the multiple exchange rate system and floated the naira, thus allowing market forces to determine the daily official rate. In October 2024, the bank announced that from December 1, 2024, it would automate forex by introducing the Electronic Foreign Exchange Matching System (EFEMS), replacing the decade-old over-the-counter system to enhance transparency and liquidity in the market. This move is part of the bank’s attempts to address inefficiencies in forex operations which have long been plagued by illiquidity, opacity, and multiple exchange rates. The most significant benefit of automation will be increased transparency. Determining the real state of demand and supply in the forex market has been difficult leading to market distortions, with insiders holding an advantage. With EFEMS, real-time data on forex transactions will be available to the public, businesses, and international investors, allowing them to see market conditions clearly and make informed decisions. This shift is expected to level the playing field, reducing opportunities for bias and favoritism in foreign currency allocation.

U.S. Banks & Local Correspondent Banks

Citibank and JP Morgan are U.S. banks with long standing operations 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.

For additional information, visit the U.S. Department of State’s Investment Climate Statements.