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. Some companies will advance local currency upon arrival, so that no money exchanges need to be made.
Nigeria's currency is the Nigerian Naira (NGN), which is divided into 100 Kobo.
It is not recommend that expats carry any substantial amount of cash; rather carry only the necessary amount that may be required for a daily basis.
That said, Nigeria is still, unfortunately, 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.
Banking in Nigeria
The CBN, or Central Bank of Nigeria, is the main bank in Nigeria and the institution that regulates banking in the country.
Expats are able to operate both foreign and local accounts from Nigeria. As previously mentioned, foreigners generally prefer to maintain their foreign accounts, and to open a local one for small amounts of cash. Salaries are 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.
Systems, such as Internet banking, do exist and do 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 pretty unreliable and way behind the times.
ATMs in Nigeria
ATM machines are available at some banks, but not all of them accept foreign cards. The ATMs that do accept foreign cards have a daily withdrawal limit of 100 NGN; however, ATM fraud is prevalent, so vigilance and communication with the bank will be essential.
Credit cards in Nigeria
It is possible to get an international credit card, but it is not recommended, as there would be very few places to use it. If using a credit card for any transactions, it’s best to be studious when looking at bank statements to ensure there has been no credit card fraud. It is advisable to check with the bank before coming into the country and using the card, as most banks will automatically cancel a card after just one Nigerian transaction.
419 scams in Nigeria
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 somewhat of an international household name for any dodgy or illegal monetary activity. As part of the Nigerian experience, expats can fully expect to be 419ed at least once.
Domiciliary accounts in Nigeria
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.
Opening an account is quite simple. As an expat, one will need to provide two letters of reference from existing GTB account holders, a copy of one’s driver’s license, National ID Card, proof of residence and 100 USD.
It’s possible to do online transfers with this account, but one will need to contact GTB for their code. Be patient and be ready to answer a plethora of questions before they release the code. All money wired into Nigeria attracts transaction fees both locally and from the bank abroad, and levies an additional one percent withdrawal fee locally.
Taxes in Nigeria
Income tax in Nigeria is charged at progressive rates of up to 25 percent on total income. Whether an expat is liable to paying taxes in Nigeria depends on their resident status in the country. Residents are taxed on their worldwide income. For tax purposes, a resident is defined as a person who is in Nigeria for 183 days within the tax year. Expats should confirm whether they are eligible for double-taxation exemption if their home country has a tax agreement with Nigeria.