This article dissects Nigeria’s new FX rulebook with a focus on how the CBN plans to deepen market confidence and efficiency in the operation and management of the nation’s foreign exchange market. MARK ITSIBOR reports
It came eight years after the last edition was issued in 2018, about the time when Nigeria’s foreign exchange market is undergoing changes, including exchange rate reforms, greater market liberalisation and efforts to improve liquidity and price discovery.
The 4th edition of the Forex Manual which took effect from June 1, 2026 is largely seen as an intervention of sort to sanitize the foreign exchange market and give credibility to its operationality.
For many stakeholders present at the unveiling ceremony, the revised document represents a move towards a more predictable, rules-based and transparent foreign exchange ecosystem.
Industry players and economic experts, the unveiling of the 4th edition of the Central Bank of Nigeria’s Foreign Exchange Manual marks a significant chapter in the country’s ongoing effort to rebuild confidence in its foreign exchange market, strengthen transparency and provide a clearer operational framework for businesses, investors and financial institutions.
Launched in Abuja before an audience of bankers, regulators, exporters, corporate executives, development partners and market operators, the revised manual is more than a regulatory update. It is a comprehensive attempt to align Nigeria’s foreign exchange administration with evolving market realities, international best practices and the broader reform agenda of the Central Bank of Nigeria (CBN).
Economic analyst, Dr. Justin Amase, described the manual as a timely intervention that provides clarity for market participants and reduces uncertainties that often discourage investment decisions. According to him, foreign investors typically look beyond exchange rate levels and pay close attention to the predictability of regulatory frameworks.
“When market participants understand the rules, documentation requirements and operational procedures, confidence improves and transaction costs decline,” he said.
However, experts have stressed that implementation would ultimately determine success. Professor of development economics, Hassan Musa argued that “the quality of a regulatory framework is measured not only by what is written in the document but by how consistently it is applied.”.
Foreign exchange remains one of the most critical pillars of economic management in an open economy such as Nigeria’s. It affects trade flows, inflation, investment decisions, capital movements and overall macroeconomic stability.
Over the past decade, Nigeria has grappled with recurring foreign exchange shortages, exchange rate distortions, multiple market windows, declining investor confidence and pressure on external reserves. These challenges often translated into uncertainty for businesses and investors. Against this backdrop, the CBN embarked on a comprehensive review of the foreign exchange framework.
Speaking at the launch, CBN Governor, Olayemi Cardoso, described the revised manual as part of a collective commitment to strengthening Nigeria’s macroeconomic foundations, enhancing transparency and reinforcing confidence in the foreign exchange market.
According to him, foreign exchange governance has become increasingly important in a world characterised by economic volatility, technological disruptions and complex cross-border financial transactions.
The central theme running through the revised manual is transparency. For years, market participants complained about ambiguities, inconsistent interpretations of regulations, procedural bottlenecks and administrative delays that often-increased transaction costs and discouraged participation in the formal market.
For commercial banks, which serve as the primary intermediaries in Nigeria’s foreign exchange market, the revised manual offers greater clarity and reinforces standards of market conduct.
Speaking on behalf of the chief executives of deposit money banks, Oliver Alawuba, described the manual as a significant step in consolidating ongoing foreign exchange reforms.
He noted that the document complements the recently introduced Nigerian Foreign Exchange Code and reflects a clear policy direction centred on transparency, ethical conduct, stronger documentation standards and improved oversight. Mr. Alawuba observed that the foreign exchange landscape has changed considerably in recent years.
According to him, a few years ago banks routinely struggled to meet customers’ foreign exchange requests. Today, increased confidence and improved market conditions have altered that dynamic, reflecting the impact of reforms undertaken by the CBN.
He emphasised that the sustainability of those gains would depend on discipline among operators, regulators and market participants. The banking industry, he assured, would support implementation of the manual and ensure adherence to its provisions.
Deputy Governor for Economic Policy, Mohammad Abdullahi, explained that the review was initiated as part of a broader reform programme aimed at restoring confidence, improving liquidity and creating a more market-oriented foreign exchange system.
According to him, the manual is intended to serve as a single authoritative reference point for all participants in Nigeria’s FX ecosystem.
By standardising procedures, clarifying rules and defining documentation requirements, the document seeks to ensure uniform interpretation across authorised dealers, exporters, corporates, regulators and government agencies. The broader objective, he said, is to support the emergence of a foreign exchange market that is stable, deep, liquid and globally competitive.
The revised manual introduces several notable changes designed to simplify transactions while strengthening regulatory oversight.
Among the major provisions is the harmonisation of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) disbursement structures with existing Bureau de Change guidelines. Under the new framework, 75 per cent of approved travel allowances will be disbursed electronically, while only 25 per cent may be paid in cash.
The allowable advance payment for imports has also been increased from 15 per cent to 30 per cent, providing businesses with greater flexibility in executing international trade transactions.
Another important provision addresses import shortfalls and excess deliveries. The manual now allows margins of plus or minus 10 per cent of the Cost and Freight (CFR) value stated on Form M, reflecting practical realities in international trade.
For exporters, the CBN has removed charges associated with processing Form NXP, a move expected to reduce transaction costs and encourage export activities.
The manual also introduces comprehensive provisions covering service exports, including documentation requirements and reporting obligations. This reflects the growing contribution of technology, digital services and professional services to Nigeria’s export earnings. Technology companies also receive specific attention through newly introduced documentation requirements governing remittances.
In a move that supports regional economic integration, the manual incorporates provisions for transactions under the Pan-African Payment and Settlement System (PAPSS), potentially facilitating smoother intra-African trade and reducing dependence on third-country currencies.
The document allows payments for services, fees and charges in foreign currency where receipts are generated in foreign currency. Other reforms include the introduction of Non-Resident Investment Accounts and Non-Resident Ordinary Accounts, expanded access to foreign exchange for educational expenses with tuition payments of up to $25,000 per semester for undergraduate and postgraduate studies, and greater flexibility for holders of export proceeds domiciliary accounts.
Foreign companies operating within Nigeria’s extractive industries can now repatriate 100 per cent of export proceeds, a provision likely to be viewed positively by foreign investors.
The revised framework also removes the mandatory requirement for Form A when remittances are made using ordinary domiciliary accounts, although banks remain responsible for verifying the legitimacy of transactions.
To discourage speculative activities, the manual explicitly prohibits front-loading of foreign exchange purchases.
Economic analysts view the revised manual as an important institutional reform capable of improving confidence in Nigeria’s foreign exchange market.
Professor Musa stated that provisions promoting transparency, standardisation and easier access to legitimate foreign exchange transactions could encourage greater participation in formal channels while reducing opportunities for arbitrage and market distortions.
He also pointed to the inclusion of PAPSS provisions, service export regulations and non-resident account structures as evidence that the CBN is positioning the market for a more integrated and globally competitive future.
The atmosphere at the unveiling reflected broad support for the reforms. For instance, participants repeatedly highlighted the importance of consistency, regulatory certainty and stakeholder cooperation in achieving the objectives of the new framework.
The revised manual arrives as Nigeria seeks to attract more foreign capital, improve export earnings, strengthen market liquidity and enhance economic competitiveness. Its provisions are expected to reduce administrative bottlenecks, improve processing timelines, support legitimate business transactions and strengthen compliance standards across the market.
For the CBN, the manual forms part of a wider strategy to deepen market confidence and create a foreign exchange system capable of supporting economic growth.
Whether it succeeds will depend largely on effective implementation, regulatory discipline and continued collaboration among banks, exporters, importers, investors and government institutions.
