Regulatory Digest for January 2024


As we step into the new year, the regulatory landscape continues to evolve with changes and developments that have far-reaching implications across industries. January has witnessed a series of noteworthy regulatory updates, reflecting the ongoing commitment of regulatory authorities to adapt and respond to dynamic economic and societal shifts. These updates will influence how business entities navigate their operations.

In this regulatory digest, we delve into some key directives, guidelines and other general updates that have emerged from regulatory agencies.

Guidelines/Regulations released in January 2024

  • Guidelines for the registration of ICT service providers/contractors for the delivery of IT services to Ministries, Departments and Agencies (MDAs).

The National Information Technology Development Agency (“NITDA” or "Agency") published the draft Guidelines for the registration of ICT service providers/contractors for the delivery of IT services to Ministries, Departments and Agencies (MDAs) (“Draft Guidelines”). The Draft Guidelines seek to amend the current guidelines on the registration of ICT service providers/contractors for the delivery of IT services to Ministries, Departments and Agencies (MDAs). The objective of the Draft Guidelines is to give preference to made-in-Nigeria products and services in procuring Information and Communications Technology (ICT) by MDAs, thereby promoting local content. Consequently, the Agency is mandated to register and certify all indigenous IT service providers/contractors. This measure is designed to guarantee the Government receives high-quality and sustainable IT projects, elevate professionalism in IT service provisioning, and facilitate the growth of quality indigenous IT companies.

The Agency invited members of the public to provide their feedback and submissions regarding the Draft Guidelines to harmonise and align the feedback with the final draft.

Although the Draft Guidelines introduced key changes such as sanctions, compliance with the guidelines by the Agency to ensure only registered vendors are engaged in IT projects by MDAs and the request for physical meetings when necessary, the Draft Guidelines lack specific provisions for expatriate staff, verifiable competence, service level agreements, financial standing, certificate renewal, data protection, sanctions, and dispute resolution processes. These omissions need to be addressed to ensure clarity, consistency, and effectiveness in governance and compliance within the outlined framework. We anticipate that the final draft will address these issues.

  • Reviewed guidelines on international money transfer services in Nigeria

The Central Bank of Nigeria (CBN) released the Revised Guidelines on International Money Transfer Services in Nigeria (“Revised Guidelines”), which provide a framework for the licencing and operations of International Money Transfer Operators (IMTOs) in Nigeria. The revised guidelines were released following CBN’s recent reforms to liberalise the foreign exchange market and boost diaspora remittances and other capital market inflows, amongst other objectives as stated in the guidelines.

The revised guidelines for International Money Transfer Operations (IMTOs) have brought about significant changes. Some of these changes include the introduction of two phases of approval (approval in principle and final approval). Additionally, the application fee for IMTOs has been increased, and they are now required to renew their approval annually within the first quarter of every year. Further, the new guidelines prohibit banks and fintechs from operating as IMTOs and also prohibit IMTOs from engaging in any outbound transaction. This means that only inward transactions are allowed.

Moreover, money transfers have been extended to "business to persons" and "business to business" transactions. The revised guidelines also mandate that foreign IMTOs must have a minimum share capital of 1 million US Dollars, while indigenous IMTOs must have their Naira equivalent. These changes aim to streamline the IMTO industry and ensure it operates fairly and transparently. We will publish an elaborate piece on this guideline, its overall implications, and what it means for fintechs looking to play in this space.

Trends & Insights

This section highlights some of the major trends that cut across different industries.

Central Bank of Nigeria (CBN)

  1. Digital Transformation: The CBN's approval and the imminent launch of the Naira stablecoin (cNGN) reflect a forward-looking stance, embracing digital innovation within the financial sector. This move signals the initiation of a new era characterised by enhanced financial fluidity as the cNGN bridges the Naira with the global market through the integration of blockchain technology.

By introducing the cNGN, the CBN is modernising traditional payment systems and paving the way for Nigeria to participate more actively in the global digital economy.  This initiative may further advance the recent directive of the CBN allowing the opening of bank accounts for Virtual Assets Service Providers (VASPs). There have also been reports of crypto startups allegedly applying for licences from the Securities and Exchange Commission (SEC) following CBN’s directive. This action underscores the CBN's commitment to fostering technological advancement and enhancing financial inclusion.

  1. Regulatory Measures and Accountability: The CBN, in its oversight function, dissolved the board and management of Union, Keystone and Polaris banks and further appointed new board members to oversee the affairs of the banks.

The recent actions taken by the CBN suggest a trend of increased regulatory scrutiny and intervention in the financial sector.  By dissolving the boards and management of Union Bank, Keystone Bank, and Polaris Bank, the CBN is demonstrating a proactive approach to addressing potential issues within these institutions.  The appointment of new appointees to oversee the affairs of these banks also reflects the CBN's commitment to restoring confidence and ensuring effective governance within the institutions.  You can read an analysis of this action in our article here.

  1. Financial Sector Integrity: In the bid of the CBN to sanitise the financial sector and ensure trust among all market participants, announced clearing the foreign exchange liabilities of 14 lenders and has completed payments of all verified claims owed to foreign airlines.

This move by the CBN reflects a commitment to enhancing confidence and integrity within the financial sector. By announcing the clearing of foreign exchange liabilities for 14 lenders and fulfilling payments owed to foreign airlines, the CBN is taking proactive steps to clear verified backlogs across all sectors that have contributed to the depreciation of the Naira.  This action aligns with the CBN's broader objective of reforming the foreign exchange market and promoting a system where market forces play a decisive role in determining exchange rates. Reforming the foreign exchange market is crucial, given the negative consequences of the Naira devaluation on the economy. For instance, foreign companies are leaving Nigeria to mitigate the risks associated with currency devaluation and forex challenges. Recently, the Securities and Exchange Commission granted GlaxoSmithKline (GSK) Consumer Nigeria Plc's request to exit the Nigeria Exchange Limited (NGX), indicating the impact of currency instability on business operations.

Also, as part of the CBN’s effort to reform the foreign exchange market, it announced its intent to prosecute forex defaulters, citing evidence of grave infractions, gross abuse, and significant non-compliance with market regulations by forex operators.  Thus, the CBN sends a clear message that it will hold those violating forex regulations accountable. This enforcement action is likely aimed at safeguarding the integrity of the forex market, protecting investors from potential abuses, and reforming the Nigerian foreign exchange market.

  1. CBN’s directive to banks: The CBN has issued a directive to address concerns about banks' increasing exposure to foreign currencies, which could pose risks to the financial system. The directive includes several requirements to ensure banks manage their foreign currency exposures prudently to mitigate risks and maintain financial stability.

The directive imposes a threshold that banks’ NOP will not exceed; that is, 20% short or 0% long of the bank's shareholders’ funds. The intention is to prevent excessive exposure to foreign exchange risks, ensuring prudent risk management and safeguarding the financial stability of banks by maintaining a balanced and controlled approach to their foreign currency positions in relation to their capital base. In addition, banks are now required to keep track of their daily and monthly NOP and foreign currency trading position (FCTP) using the CBN templates attached to the circular. They are also required to borrow and lend in the same currency (natural hedging) to avoid risks from different currency values, among other requirements, which we will cover in an article to be published soon.

This move by the CBN aims to ensure the stability of the Naira and safeguard the financial sector from undue risks.

  1. Cap Removal on Exchange Rate by Authorised Dealers: The CBN has also issued a circular directing the removal of the cap placed on the allowable limit on the exchange rate quoted by International Money Transfer Operators (IMTOs). This directive reverses the September 13, 2023 circular, which stated that IMTOs must quote rates within an allowable limit of -2.5% to +2.5% around the previous day's closing rate of the Nigerian foreign exchange market.

By issuing this reversal, the cap on the allowable limit of -2.5% to +2.5% is removed. This essentially harmonises the official and black market rates and implies that IMTOs can now trade forex at the prevailing market rate, which would bring the reference rate for spot FX operations closer to the market rate affected by the forces of supply and demand.  Additionally, as mentioned earlier, the CBN released revised guidelines on the operations of IMTOs in Nigeria.

Security and Exchange Commission (SEC)

  1. Digital Security Platform: In the wake of the CBN's decision to lift the ban on trading digital assets, the Securities and Exchange Commission (SEC) has granted approval to NASD Plc to unveil its Digital Security Platform (N-DSP) under the Regulation Incubation programme. The platform is poised to revolutionise digital securities issuance, trading, and settlement. It aims to democratise access to capital markets, leveraging blockchain technology to enhance accessibility while minimising costs.

The recent move by CBN to lift the ban on trading digital assets marks a significant shift in regulatory stance towards emerging financial technologies, as the SEC can freely oversee the operations of companies that deal with digital assets under its Rules. This decision reflects a growing recognition of the potential benefits of digital assets and blockchain technology within the financial sector. The launch of N-DSP represents a pivotal moment in the evolution of digital securities issuance, trading, and settlement in Nigeria. This initiative aligns with global trends towards digitalisation and decentralisation in financial markets.

Judicial Updates

  1. Court Dismisses Falana’s Suit against CBN on Sale of Polaris Bank

The Federal High Court of Lagos State dismissed a suit by Femi Falana SAN where he challenged the sale of Polaris Bank by the Central Bank of Nigeria. The case was instituted to determine whether section 42 (2) of the Banks and Other Financial Institutions Act 2020 and the Public Procurement Act 2007 empowers the CBN to validly sell Polaris Bank for N50,000,000,000 (Fifty Billion Naira) after revitalising it for N1,300,000,000,000 (1.3 Trillion), claiming that the purported sale was illegal and violates the Public Procurement Act, 2007.

  1. Court Orders CBN To Grant HEDA’s Request for Information On MTN’s Improper Repatriation Of Funds [January 26, 2024]

The Federal High Court in Abuja ordered the Central Bank of Nigeria to grant the Freedom of Information request by the Human and Environmental Development Agenda (HEDA Resource Centre). The ruling directed the respondent to provide the following information: "the initial fine imposed on MTN Nigeria, the fine eventually paid by MTN Nigeria, the basis for the initial fine imposed on MTN Nigeria and any concession which led to a reduction of the fine; and the procedure through which the concessions were made."

The CBN was sued by the Incorporated Trustees of HEDA Resource Centre because the apex bank had neglected to provide the information requested regarding the specifics of the improper repatriation of funds lodged against MTN back in 2021.

  1. Court Affirms FCCPC’s Consumer Complaints Resolution Powers [January 22, 2024]

The Federal High Court was approached to consider relevant provisions of the Nigerian Constitution and the Federal Competition and  Consumer Protection Act 2018 (‘FCCPA’) to determine the validity of FCCPC's exercise of powers to resolve a consumer complaint against Wema as a banker.

The court held, among other things, that the FCCPC jurisdiction covers all matters of dispute or complaint. Also, section 104 of the FCCPA grants the FCCPC superior jurisdiction regarding consumer protection and competition.


The first month of the year has seen significant regulatory developments with far-reaching implications across industries, reflecting the ongoing commitment of regulatory authorities to ensuring compliance, accountability, and stability across various industries. As the regulatory landscape evolves, shaping how businesses operate, stakeholders closely monitor the emerging trends and directives from regulatory authorities. Thus, staying abreast of evolving regulations and anticipating future shifts will be paramount for businesses seeking to thrive in a rapidly changing economy.

  1. More information on the CBN Guidelines for the operation of Virtual Asset Service Providers (VASPs) is available here:
  2. NASD PLC  is a Securities Exchange registered by SEC, to operate a formal Over The Counter (OTC) market in Nigeria The acronym NASD was derived from “National Association of Securities Dealers”.
  3. FHC/ABJ/CS/1110/2021