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Part of the guideDoing business with Africa: paying and getting paid in Nigeria
The short answer
A UK business can pay a Nigerian contractor in two ways: wire pounds or dollars to the contractor's domiciliary (foreign currency) account at a Nigerian bank, or send pounds to a provider that converts them and pays naira into the contractor's local account, usually within minutes. Agree the currency in the contract, validate the account name before the first payment, and keep invoices and remittance advice for both sides' tax records.
Paying a developer in Lagos or a designer in Abuja from a UK business account is now routine, but the route you choose decides how fast the money lands, what it costs and which currency the contractor ends up holding. This article covers the payment mechanics only. For the wider picture of FX, tax and compliance when you work with Nigerian counterparties, see our guide to paying and getting paid in Nigeria.
The two routes, and what each means for your contractor
Every payment from the UK to a Nigerian contractor ends in one of two places: a foreign currency balance or a naira balance.
Route 1: pounds or dollars to a domiciliary account
Most Nigerian banks offer domiciliary accounts in USD, GBP or EUR. You send an international wire (usually SWIFT) from your UK bank to the contractor's domiciliary account. The contractor keeps the foreign currency and chooses when to convert. Many prefer this because it protects earnings from naira moves. Under the Central Bank of Nigeria's (CBN) Foreign Exchange Manual, in force from 1 June 2026, holders of ordinary domiciliary accounts have unrestricted access to their balances and no longer need Form A to send money out of them, which makes these balances more useful to contractors than before.
Route 2: naira to a local account
You pay pounds to a provider that converts them and pays naira into any Nigerian bank account over the local instant rails, identified by a 10-digit NUBAN account number. The contractor receives spendable naira at once. The trade-off is that conversion happens at the provider's rate on the day, so you should compare that rate with the official Nigerian Foreign Exchange Market (NFEM) rate. Our explainer on how the official NFEM rate is set shows where to find it.
Comparing the routes
| Wire to domiciliary account | Naira payout via a provider | |
|---|---|---|
| Currency received | GBP, USD or EUR | Naira |
| Typical arrival | 1 to 3 working days | Minutes to same day |
| Costs you see | UK outgoing wire fee | Provider fee and FX margin |
| Costs you may not see | Intermediary bank deductions; receiving bank charge | The gap between the provider's rate and the NFEM rate |
| Details you need | Account name, account number, bank name, SWIFT/BIC, any intermediary bank | Account name, NUBAN, bank name |
| Best for | Larger invoices; contractors saving in hard currency | Monthly retainers; contractors with naira bills |
A worked example: a £3,000 monthly retainer
Take a UK agency paying a Lagos developer £3,000 a month. The figures below are illustrative; use live quotes on the day.
- Wire route. The agency's bank charges a fixed outgoing fee, and an intermediary bank may deduct a further charge in transit. If £20 goes on intermediary charges, the contractor receives £2,980 in their domiciliary account. Agree in the contract whether you send with charges shared (SHA) or paid by you (OUR), so the contractor is not short.
- Naira route. Suppose the provider charges 0.35% on the conversion and quotes ₦1,800 per pound for illustration. The fee is £10.50, leaving £2,989.50 to convert, which pays ₦5,381,100 into the contractor's NUBAN. If the provider's rate is 1% worse than the official benchmark, the hidden cost is about £30 a month, or £360 a year.
- Compare like with like. Add the visible fee to the rate gap. A provider with a low fee and a wide margin can cost more than one with a higher fee and a rate close to the official market.
The lesson is to ask every provider for the rate and the fee separately, then check the rate against the published NFEM figure for that day.
Checks before the first payment
- Validate the account name. Nigerian banks return the registered name for a NUBAN. A mismatch is the most common sign of a typo or an impersonation attempt.
- Send a small test amount to a new payee, then confirm receipt by phone or video before the full sum.
- Confirm changes to bank details out of band. A request by email to switch accounts is the classic invoice-fraud pattern. Call the contractor on a number you already hold.
- Screen the payee. UK firms must comply with the UK sanctions regime, and US-linked firms with the OFAC list, which includes Nigerian individuals and businesses designated in 2026 for cybercrime and terrorism financing. A quick screen of each new payee is good practice.
- Pay the person or company you contracted with. Do not pay a third party or a relative's account at the contractor's request. If the contractor trades through a company, check it is registered; our guide on verifying a Nigerian company walks through the steps.
Contracts, records and tax on both sides
Put the payment terms in writing: the currency, the amount, the payment date, who bears bank and conversion charges, and how invoices are submitted. Ask the contractor to invoice you monthly with their legal name, address and bank details. That invoice is your record of the expense, and the remittance advice you send back is theirs.
A self-employed individual working from Nigeria for a UK client is generally responsible for their own Nigerian tax. Nigeria's new tax laws took effect on 1 January 2026, and the federal tax authority is now the Nigeria Revenue Service (NRS). On the UK side, check that the arrangement is a genuine contract for services rather than employment, especially if the contractor works only for you on fixed hours. If you later set up a Nigerian entity and the contractor moves onto its payroll, Nigerian PAYE and pension rules apply; see the guide to payroll in Nigeria, Ghana and Kenya.
If the flow ever reverses and a Nigerian company pays your UK business for services, it will usually deduct withholding tax. Our article on Nigerian withholding tax for non-resident companies covers that side.
Paying several contractors at once
Once you pay more than a handful of people, one-by-one transfers become slow and risky. Use a bulk payment tool that takes a file or list, validates every account name before approval, and needs a second approver above a set amount. Keep a payee register with the date each set of bank details was confirmed. Review your total cost each quarter against the official rate, not against what you paid last quarter. The Nigeria business payments guide has a full checklist for setting up a payment process.
Where Pryme fits
Pryme Financial Ltd is a technology company, not a bank. In Nigeria, naira deposits are held by Solid Allianze Microfinance Bank Ltd, licensed by the CBN and insured by the NDIC up to the applicable limit; outside Nigeria, activities are carried out through regulated partners. A business multicurrency account holds GBP, USD, EUR and NGN in separate balances, and Swap shows the rate before you confirm, holds it for about 30 seconds and puts any fee on its own line. A business account can be opened from the UK, as from any country; check which local account details are available when you apply. As with any provider, ask which route a naira payout takes, for the reasons set out in the section on remittance rules above.
Bulk payouts validate every Nigerian account name before you approve. Whichever provider you use, require a second approver above a set amount and confirm any change to bank details by phone.
Questions people ask
Can I pay a Nigerian freelancer in pounds?
Yes, if they hold a GBP domiciliary account at a Nigerian bank and you send a bank wire. Payments sent through money transfer operators are paid out in naira only under CBN rules, so a freelancer who wants pounds needs a bank-to-bank wire.
What is the cheapest way to pay a contractor in Nigeria from the UK?
For regular monthly sums, a naira payout through a provider is usually cheapest, provided its exchange rate is close to the official NFEM rate. Compare the fee and the rate gap together, not the fee alone.
How long does a UK to Nigeria bank transfer take?
An international wire to a domiciliary account typically takes one to three working days. A naira payout through a provider using Nigeria's instant rails usually lands within minutes once the conversion is done.
What details do I need to pay a Nigerian bank account?
For naira: the account name, 10-digit NUBAN and bank name. For a foreign currency wire: the account name and number, bank name, SWIFT/BIC code and any intermediary bank details the receiving bank specifies.
Do I need to deduct Nigerian tax when paying a Nigerian contractor?
A UK business paying an independent contractor in Nigeria does not usually operate Nigerian payroll tax; the contractor accounts for their own Nigerian tax. Check employment status carefully, and take advice if the contractor works only for you on employee-like terms.
Sources
- Mondaq: The CBN Foreign Exchange Manual 2026 · accessed Oct 2026
- The Nigeria Lawyer: CBN grants domiciliary account holders unrestricted access to balances (June 2026) · accessed Oct 2026
- AllAfrica: CBN naira-only payouts for remittances from 1 May 2026 · accessed Oct 2026
- Kola King: CBN revised IMTO guidelines (Jan 2024) · accessed Oct 2026
- Legit.ng: OFAC designations of Nigerian individuals and firms (Sept 2026) · accessed Oct 2026
- EY: Tax registration for non-resident companies under Nigeria's 2025 tax Acts · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.