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Nigeria has a developed banking sector and both local and international banks have a presence in the country. Most expats, particularly those only staying for a short while, prefer to keep an offshore bank account and open a local account primarily for day-to-day living.
Money in Nigeria
Nigeria's currency is the Nigerian Naira (NGN or ₦), which is divided into 100 kobos. Kobos are worth very little though, and are not used commonly. Naira is available in the following denominations:
Notes: NGN 5, 10, 20, 50, 100, 200, 500 and 1,000
Coins: NGN 2 and 1, and 50 kobo
Exchanging foreign currency for the local Naira is relatively simple, though converting back may be more difficult. Money can be exchanged at international airports and large hotels, though rates are not always favourable. It's often better to convert currency at banks or official money exchange services.
One element of dealing with money that expats will notice is the art of haggling at a local market in Nigeria. New arrivals may stand out and can easily fall victim to overpriced goods. Though getting the hang of bargaining may take time, it's worth attempting to negotiate for a better deal in Nigerian markets.
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, among others, Ecobank Nigeria, Access Bank, Citibank, Standard Chartered Bank and Union Bank of Nigeria.
Banking systems in Nigeria operate various services including cellphone and internet banking. While expats may be concerned about the safety of online banking and have perceptions that systems are not always reliable or secure, in reality it's quite safe. Advanced-fee or 419 scams are common in Nigeria where scammers may send emails convincing an individual to send them money. We recommend that expats ensure that each transaction is legitimate and follow general internet safety guidelines with online banking.
Opening a bank account
Expats are able to operate both foreign and local accounts in Nigeria. Foreigners generally prefer to maintain their foreign accounts and 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.
Do note that the costs involved in managing a foreign account are huge; transaction fees can be astronomical. Still, these accounts tend to be simpler for expats planning on returning to their home country. So, accepting the extra charges is a necessary evil.
Alternatively, operating a local account may require expats to have patience, and they will need to research the processes and documents required by the specific bank.
A useful bank account type for expats in Nigeria is a domiciliary account. 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 well as Zenith Bank and Fidelity Bank, as the best and safest options to receive salaries locally and move money out to the country and currency of their choice.
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. Limits also apply abroad when withdrawing cash from a Nigerian bank account. ATM fraud is prevalent in Nigeria, so vigilance is essential when drawing cash.
Nigeria is still largely a cash-based society, so cash will still be necessary for many purchases, but the country is evolving to become more cash-less. Many establishments accept debit and credit cards as standard forms of payment for goods and services.
If using a credit card for any transactions, expats should look carefully 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.
Taxes in Nigeria
Whether an expat is liable to pay taxes in Nigeria depends on their resident status in the country. Expats are generally considered a resident for tax purposes if they have been in Nigeria for a minimum of 183 days over a period of 12 months. Yet, in some cases, non-residents may be liable for tax. For specific advice and support, we recommend that expats in Nigeria consult a tax consultant or accountant.
Income tax in Nigeria is charged at progressive rates of up to 24 percent of total income. Certain expenses may be deductible from tax, including charitable donations and healthcare and insurance costs.
Residents are taxed on their worldwide income. But Nigeria has double taxation treaties with several countries, including Belgium, Canada, China, France, South Africa and the United Kingdom, among others. Expats should confirm whether they are eligible for double-taxation exemption and if their home country has a tax agreement with Nigeria.