We recently had to look at how a client can pay its foreign staff on assignment in Nigeria - specifically whether they can be paid in a foreign currency (USD is perpetually popular) or have to be paid in the local Nigerian currency (the naira, ₦).
Why is this even an issue? HR professionals who deal with expats will be used to those expats being paid in a currency other than the currency of the host country.
The background is that the Nigerian government, and the Central Bank of Nigeria (CBN), are very worried about what they refer to as the “dollarisation” of the Nigerian economy (we love the non-US spelling!), which they feel has significantly contributed to the need to devalue the ₦ in recent times.
In 2015, the CBN issued formal circulars warning businesses that they have to pay for local goods and services in the local currency. On 17 April 2015, the CBN even warned that:
“… it is illegal to price or denominate the cost of any product or service (visible or invisible) in any foreign currency in Nigeria and no business offer or acceptance should be consummated in Nigeria in any currency other than the Naira.”
It also said, however, that it would allow a number of exceptions to this rule (such as payments in the oil & gas industry).
If you scratch beneath the surface, the issue becomes even more complicated, with many local lawyers pointing out the CBN has completely mistaken the underlying legislation, and that what it says Is illegal is not actually illegal at all.
How, and if, this applies to expats is a long story – but something worth considering if you need to assign anyone to Lagos.