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Best Ways to Secure USD for International Payments from Nigeria

2025-05-26 18:00

Nigerian Market Overview

For enterprise-level companies in Nigeria, the ability to reliably secure US dollars (USD) for international payments is no longer a back-office function - it’s a mission-critical business requirement. Whether you’re importing essential machinery, paying offshore service providers, settling obligations with foreign partners, or repatriating returns to investors, access to USD is essential for maintaining supply chains, managing reputation, and scaling global operations.
However, in Nigeria’s current macroeconomic climate, this is easier said than done.

The Dollar Dilemma Facing Nigerian Businesses

Due to persistent foreign exchange (FX) scarcity, evolving Central Bank of Nigeria (CBN) regulations, and heightened global demand for hard currencies, many Nigerian enterprises face ongoing challenges in sourcing USD through formal channels. The volatility of the naira, coupled with limited FX supply in official windows, has forced many businesses into delays, inflated costs, or even halted operations.
Moreover, traditional methods like Form A and Form M applications are plagued with bureaucracy, long processing times, and unpredictability. As a result, many finance and procurement departments are now rethinking their FX sourcing strategies.

What This Guide Will Cover

This guide provides Nigerian enterprise companies with a practical, legal, and up-to-date roadmap to securing USD for cross-border payments. We’ll break down:
  • Why traditional FX channels are struggling and what that means for your business
  • How to use official frameworks effectively (like Form A/Form M, domiciliary accounts, export proceeds)
  • New and emerging options through licensed fintech and FX aggregators like Kanzum
  • Compliance best practices to avoid regulatory pitfalls
  • Actionable tips to increase your chances of faster approvals and seamless payments
If your organization is looking to navigate Nigeria’s complex FX terrain with confidence, reduce costs, and ensure uninterrupted international operations, this guide is for you.

Why Nigerian Enterprises Struggle to Access USD

Despite the increasing need for cross-border transactions, Nigerian enterprise businesses continue to face significant hurdles in securing USD for international payments. These challenges stem from a combination of regulatory, macroeconomic, and structural issues in the local foreign exchange (FX) ecosystem.
Below are the core reasons why accessing USD remains difficult for Nigerian companies:

1. Central Bank of Nigeria (CBN) FX Policies

The Central Bank of Nigeria plays a central role in managing the country’s foreign exchange market. Over the years, various CBN policies—including the restriction of access to FX for specific imports, periodic changes to the exchange rate regime, and the rationing of FX supply—have made it increasingly difficult for businesses to access dollars.
While these policies are aimed at protecting the naira and managing reserves, they often result in inconsistent access to FX for legitimate business needs. For enterprise companies with large dollar-denominated obligations, the unpredictability of these policies can delay operations and inflate costs.

2. Volatility in the Naira Exchange Rate

The Nigerian naira has experienced significant volatility in recent years, often trading at vastly different rates in the official, NAFEX (Investors and Exporters) window, and parallel markets. This disparity creates uncertainty for CFOs and treasury teams, making it difficult to budget accurately for FX obligations.
Many businesses are forced to make last-minute decisions or source USD at unfavorable parallel market rates—exposing them to FX risk and eroding margins.
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3. Limited Official FX Windows

Despite reforms aimed at liberalizing the FX market, access to official FX windows is still restricted. Banks often have limited allocations of USD from the CBN, which means applications are delayed or rejected altogether. The prioritization of specific sectors, such as manufacturing or agriculture, further sidelines businesses in tech, consulting, or services.
This creates a backlog of pending applications, leading some enterprises to rely on informal or less-regulated FX sources, increasing compliance risk.

4. Bureaucracy and Delays in Form A and Form M

The Form A (for payment of school fees, medical bills, etc.) and Form M (for importing goods) processes are essential gateways to official FX access. However, they’re notoriously bureaucratic and time-consuming. Required documentation must be flawless, and approval timelines can stretch from days to weeks—even for high-priority business needs.
Mistakes in documentation, delayed approvals from the Nigeria Customs Service or commercial banks, or lack of FX liquidity can halt the process entirely, leaving businesses stranded without access to required dollars.
For Nigerian enterprises, the road to accessing USD is filled with regulatory roadblocks, market instability, and administrative bottlenecks. Understanding these pain points is the first step in crafting a more resilient, multi-channel FX strategy.

Official Channels to Access USD

Despite the well-documented challenges, several legitimate channels still exist for Nigerian enterprises to access USD for international transactions. These official methods, when used strategically and compliantly, can offer a secure and sustainable way to meet FX obligations—especially for enterprises with predictable dollar needs.
Below are the main official routes for accessing USD in Nigeria:

1. Applying via the Central Bank (Form M and Form A)

The Central Bank of Nigeria (CBN) provides foreign exchange to qualified applicants through designated windows, typically processed via commercial banks. Two common application types are:

Form M (For Imports)

Form M is required to access FX for the importation of physical goods. It must be opened before placing an order with a foreign supplier and involves documentation such as:
  • Proforma invoice
  • Insurance certificate
  • Product catalog or technical description
  • Regulatory approvals (e.g., SONCAP, NAFDAC)
Once approved, it enables the importer to access CBN-allocated FX at the prevailing official rate.

Form A (For Services)

Form A is used for invisible transactions such as:
  • Payment for foreign professional services
  • International subscriptions
  • Software licenses
  • Training and consultancy fees
Applicants must provide invoices, tax documentation, and sometimes regulatory clearances, depending on the service category.
Tip: Form A is often processed more quickly than Form M, especially for service-based businesses.

2. Using Your Commercial Bank’s Domiciliary Services

Another legal method for receiving or holding USD is through domiciliary (dom) accounts offered by Nigerian commercial banks. These accounts allow enterprises to:
  • Receive USD from foreign clients or partners
  • Retain export proceeds
  • Pay international vendors directly (subject to documentation)
While banks cannot sell you large amounts of FX directly due to CBN restrictions, holding a domiciliary account allows you to accumulate USD from permissible sources and use it for approved payments.
Tip: Always ensure the source of inflow is well-documented. Banks will request invoices, SWIFT copies, and proof of services rendered before approving outward payments.

3. Export Proceeds and Inward Remittances

If your enterprise is export-oriented, earning USD through legitimate export operations is one of the most sustainable ways to secure FX.
According to CBN guidelines:
  • Exporters are allowed to retain a percentage of their FX proceeds in a domiciliary account (typically 30%-40%)
  • These funds can be used without Form A/M approval, as long as documentation is clear
Inward remittances from foreign partners or investors can also be received and utilized for payments, provided they’re declared and routed properly.
Tip: To benefit from this route, register with the Nigerian Export Promotion Council (NEPC), obtain an export license, and use banks with strong export processing support.

Tips for Faster Approvals

To increase your chances of quickly accessing USD through official channels:
  • Ensure all documentation is accurate and complete: Errors or omissions are a major cause of delays.
  • Work with banks that have experience in trade finance and good relationships with CBN.
  • Time your applications strategically: CBN typically allocates FX on specific days. Submitting early improves your chances.
  • Maintain good account standing with your commercial bank: Strong banking history often leads to prioritized processing.

Using Licensed Fintech & FX Aggregators

As official channels become increasingly bureaucratic and limited in supply, many Nigerian enterprises are turning to licensed fintech platforms and FX aggregators to meet their USD needs. These modern, technology-driven solutions offer faster processing, better transparency, and often more competitive rates—provided they operate within the legal and regulatory frameworks established by Nigerian authorities.
Let’s explore how these platforms work and what businesses need to consider before engaging with them.

1. Fintechs Like Kanzum and Regulated Aggregators

A growing number of fintech platforms—such as Kanzum—are offering USD sourcing and international payment solutions tailored for enterprise needs. These platforms act as regulated FX aggregators, connecting Nigerian businesses with vetted, compliant sources of foreign exchange.
Kanzum, for example, helps corporate clients:
These fintechs differentiate themselves through speed, automation, real-time FX matching, and lower transaction friction - especially valuable for companies under pressure to make time-sensitive global payments.

2. How These Platforms Source USD and Process Payments

Unlike banks that rely heavily on allocations from the CBN, licensed FX platforms aggregate dollars from a range of legitimate sources, including:
  • Exporters with FX proceeds
  • Corporates holding excess USD in domiciliary accounts
  • Inward remittance flows
  • Multinational liquidity pools
  • Interbank market participation
They then match these sellers with verified buyers—typically Nigerian businesses looking to pay for goods or services abroad. Once the match is made and documentation is approved, the platform facilitates the USD transfer via international banking rails or SWIFT, directly to the beneficiary.
Typical use cases include:
  • Paying for cloud software subscriptions and digital services
  • Settling invoices for international suppliers
  • Funding overseas operations or partnerships
  • Renewing global certifications or licenses

3. Regulatory Due Diligence and Licensing (SEC, CBN)

While fintech platforms offer speed and flexibility, not all providers are created equal. Nigerian enterprises must vet providers carefully to ensure they are fully licensed and compliant with CBN and SEC requirements.
Here’s what to look for:
  • CBN Registration or Approval: The provider must be authorized to facilitate FX transactions under Nigerian law.
  • SEC Licensing: As many fintechs operate across payments, investment, and remittances, SEC oversight is critical for legality and customer protection.
  • KYC/AML Procedures: Verify that the platform enforces strict Know-Your-Customer (KYC) and Anti-Money Laundering (AML) policies to ensure transparency and traceability.
  • Transaction Receipts and Documentation: Legitimate fintechs provide full audit trails, payment receipts, and tax-compliant documentation for every transaction.
Red Flag: Avoid platforms offering “instant USD” at unrealistic rates or those operating solely through informal channels without licensing transparency.
Licensed fintech platforms like Kanzum are emerging as powerful allies for Nigerian enterprises navigating FX constraints. They offer legal, fast, and transparent ways to secure USD and settle international obligations—without the bottlenecks common in the traditional banking system.

Best Practices for Compliance and Documentation

In Nigeria’s tightly regulated FX environment, compliance is not optional—it’s strategic. Whether you're accessing USD through banks, export proceeds, or fintech platforms like Kanzum, maintaining airtight documentation and regulatory compliance is essential for smooth, uninterrupted cross-border transactions.
Below are best practices every Nigerian enterprise should follow to stay on the right side of the law and improve their FX transaction success rate.

1. KYC/AML Compliance

Know Your Customer (KYC) and Anti-Money Laundering (AML) checks are required by both the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). These measures help prevent fraud, terrorism financing, and illicit financial flows.
To comply:
  • Maintain up-to-date corporate documents (CAC certificate, TIN, company profile, board resolution for transactions)
  • Ensure signatories are properly registered and verified
  • Provide accurate ownership and beneficial ownership information
  • Be prepared for periodic compliance audits by your bank or FX provider
Fintech platforms like Kanzum typically automate these checks during onboarding and require verification before you can transact. The more transparent your company is from the start, the faster your payments will be processed.

2. Proper Invoicing and Tax Documentation

Inaccurate or incomplete documentation is one of the top reasons FX applications get rejected or delayed. Ensure every transaction is backed by verifiable paperwork, especially when applying through official channels or fintech platforms.
Key documents include:
  • Proforma Invoices or Service Contracts: Clearly state payment terms, USD amounts, and counterparties
  • Tax Identification Number (TIN) and WHT/VAT Certificates (if applicable)
  • Form A or Form M reference numbers (for official FX)
  • SWIFT messages or proof of prior payments (for repeat transactions)
Using consistent formats and matching documentation with bank or fintech requirements can help avoid unnecessary back-and-forth.

3. Working with Licensed FX Dealers like Kanzum

Many Nigerian enterprises are now working with CBN-compliant FX aggregators and fintechs such as Kanzum to navigate the complex FX landscape. However, due diligence remains critical.
Here’s what to check when choosing a provider:
  • Licensing and Regulatory Status: Ensure the provider is recognized by the CBN and/or SEC
  • Transparent Rate Disclosure: The provider should show you real-time FX rates before confirming a transaction
  • Compliance Support: Look for platforms that help you organize documentation and offer guidance on Form A/Form M
  • End-to-End Recordkeeping: Legitimate platforms issue transaction receipts, tax-ready invoices, and audit-friendly logs
Pro Tip: Ask your FX provider for a summary compliance report or onboarding guide—platforms like Kanzum typically provide one to help your finance team get started quickly.
Strong compliance and documentation practices aren't just about ticking boxes—they’re essential for gaining trust with regulators, partners, and FX providers. Enterprises that stay audit-ready and organized move faster, pay less in penalties, and have greater access to legal USD channels.

Conclusion: Diversify Your FX Sourcing Strategy

Securing USD for international payments is one of the most pressing challenges facing Nigerian enterprises today—but it’s not impossible. By understanding the limitations of official FX channels, leveraging licensed fintech platforms like Kanzum, and maintaining strict compliance and documentation standards, businesses can navigate Nigeria’s complex FX landscape more strategically.
The key is to diversify your FX sourcing strategy, stay proactive with paperwork, and only engage with regulated, transparent providers. In a market defined by volatility and regulation, preparation is your strongest currency.