Banking, Money and Taxes in Nigeria
Nigeria has a developed banking sector and both local and international banks have a presence in the country. Nevertheless, most expats prefer to keep an offshore bank account in a country they are comfortable with, opening a local account primarily for day-to-day living.
Money in Nigeria
Nigeria's currency is the Nigerian Naira (NGN), which is divided into 100 kobos.
The naira is available in the following denominations:
Notes: 1,000 NGN, 500 NGN, 200 NGN, 100 NGN, 50 NGN, 20 NGN, 10 NGN and 5 NGN
Coins: 2 NGN, 1 NGN and 50 kobo
Banking in Nigeria
The Central Bank of Nigeria (CBN) is the main bank in Nigeria and the institution that regulates banking in the country. Other banks in Nigeria include, amongst others, Ecobank Nigeria, Access Bank, Citibank, Standard Chartered Bank and Union Bank of Nigeria.
Banking systems in Nigeria, such as internet banking, do exist and offer standard services but are often down, and during these times only one’s bank balance will be available. Not to mention, personal information is not guaranteed to be safe, and the perception is that the system itself is unreliable and way behind the times.
Opening a bank account
Expats are able to operate both foreign and local accounts in Nigeria. As previously mentioned, foreigners generally prefer to maintain their foreign accounts and to open a local one for small amounts of cash. Expat salaries are usually paid into foreign accounts and then changed over into the currency of choice by the employee, usually from the US dollar.
It's important to note that the costs involved in managing a foreign account are huge; transaction fees are astronomical. Still, these accounts tend to be simpler and more secure, and accepting the extra charges as necessary evils is, unfortunately, a reality.
Alternatively, operating a local account will require expats to have patience, and they will need to know all the risks involved before choosing this route.
ATMs and credit cards
ATMs are available at some banks, but not all of them accept foreign cards. Most ATMs have a daily withdrawal limit of around 150,000 NGN. ATM fraud is prevalent in Nigeria, so vigilance is essential when drawing cash.
Nigeria is largely a cash-based society, so cash will still be necessary for many purchases. More establishments are starting to accept debit/credit cards as standard forms of payment for goods and services, but be sure to be extra wary when paying with a card, as fraud is a major concern.
If using a credit card for any transactions, expats should carefully look at their bank statements to ensure there has not been any credit card fraud. Expats should notify their bank before moving to Nigeria and using their card, as many banks will automatically cancel a card after just one Nigerian transaction.
419 is the section of the Nigerian Criminal Code that deals with financial fraud, and due to the countless related scams and fraudulent activities in the country, it's become a common name for any illegal monetary activity. Expats should be careful of any suspicious transactions or proposals.
A domiciliary account is a local, foreign currency denominated account. This means it accepts and moves other currencies, not just the Naira. Many expats recommend GTB (Guaranty Trust Bank) as the best and safest option to receive salaries locally and move money out to the country of their choice.
Taxes in Nigeria
Income tax in Nigeria is charged at progressive rates of up to 24 percent on total income. Whether an expat is liable to pay taxes in Nigeria depends on their resident status in the country. Residents are taxed on their worldwide income. Expats should confirm whether they are eligible for double-taxation exemption if their home country has a tax agreement with Nigeria.