AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Most South African exporters selling to Nigeria are paid in US dollars, either in advance, under a letter of credit, or on open account for trusted buyers. The buyer's ability to pay through official channels depends on its Form M: if it is 'valid for FX', the buyer's bank can source foreign exchange on Nigeria's official market. Rand is rarely used because few Nigerian buyers can obtain it easily.
The title says rand because that is what you want in your account. In practice, a Nigerian buyer will usually pay in US dollars, and your bank converts. The commercial choice is not the currency but the payment terms, because those decide who carries the risk if something goes wrong between Durban and Lagos.
The three main terms
| Term | How it works | Who carries the risk | Suits |
|---|---|---|---|
| Advance payment | Buyer pays all or part before you ship | The buyer | First orders, small orders, custom goods |
| Letter of credit (LC) | Buyer's bank undertakes to pay against documents that match the LC | Shared: banks check documents, not goods | Large orders, new relationships |
| Open account | You ship and invoice; buyer pays later | You | Long-standing, trusted buyers |
A staged mix is common: a deposit with the order, the balance against shipping documents. Whatever you agree, put the trigger for each payment in writing (order, inspection, bill of lading, arrival).
How the Nigerian buyer gets the money
Every import into Nigeria needs a Form M registered through the buyer's bank. Sterling Bank's Form M guide explains that a Form M marked 'valid for FX' allows the buyer to pay with foreign exchange sourced from the official market, while 'not valid for FX' means the buyer must use its own foreign currency. A letter of credit can be issued on either basis. So the first question to a new buyer is: which Form M route are you using, and has your bank confirmed it? See what the buyer must file.
A buyer using its own dollars may already hold them in a domiciliary account. The CBN's 2026 FX Manual, as reported by TheCable in June 2026, lets domiciliary account holders make telegraphic transfers of up to $10,000 per day. That is a rule for the buyer's account, not a limit on your invoice, but it explains why a smaller buyer may pay a large order in instalments.
Letters of credit in practice
Under an LC, you are paid when you present documents that comply exactly with its terms, usually the commercial invoice, packing list, bill of lading, insurance certificate and any certificates such as SONCAP or NAFDAC. Banks examine documents, not goods. Most refusals come from small mismatches: a different description, a late shipment date, a missing signature. Before you accept an LC, read every condition and check you can meet it, and consider asking a South African bank to confirm it, which adds the bank's own undertaking to pay. The Nigerian-side comparison is in letter of credit vs open account.
On your side: receiving export proceeds
Your South African bank will apply the export sections of the SARB Currency and Exchanges Manual to money you receive, including how quickly proceeds should be brought in and converted, and it will ask for the export documents. We have not quoted those rules here; ask your bank's trade desk for the current requirements before you agree terms longer than a few months. On the import side, the same manual (section B.1) requires prior SARB approval for credit terms over 12 months, which is a useful guide to what regulators consider long.
Bank charges and timing
International payments carry charges at both ends and sometimes at an intermediary bank. Agree in the contract whether charges are shared (each side pays its own bank) or paid by the buyer, otherwise you may receive less than the invoice. Ask the buyer to send you the payment confirmation from its bank, with the reference, on the day it pays; that lets your bank trace the funds if they are slow to arrive. For a first order, do not release goods or original shipping documents until the money is in your account, not merely "sent".
A worked example
Example only: a Cape Town producer sells USD 50,000 of packaged goods to a Lagos distributor. Terms: 30% deposit (USD 15,000) on order, 70% (USD 35,000) against a copy of the bill of lading. The buyer's Form M is valid for FX, so its bank sources dollars for both payments. The producer ships only after the deposit clears, and releases the original bill of lading only after the balance arrives. Its maximum exposure is the cost of producing goods it has been paid 30% for.
What to check first
- Ask for the buyer's Form M number and FX status.
- Check the buyer's company on the CAC register and ask for trade references.
- Decide terms by risk, not habit: advance or LC for new buyers.
- Agree who pays bank charges on each side.
- If the product is regulated, confirm SONCAP or NAFDAC status first; see SONCAP for SA goods.
Where Pryme fits
Some Nigerian buyers, especially smaller ones, prefer to pay in naira. A Pryme Business Account opened from South Africa can receive naira and dollars with local details for each, and you can raise invoices from it; convert with Swap only when you choose, seeing the rate and the fee before you approve. Outside Nigeria, Pryme's services are provided through regulated partners.
Questions people ask
Can a Nigerian buyer pay me in rand?
Rarely. Most buyers pay in US dollars from the official market or their own domiciliary accounts, and your bank converts.
Is a letter of credit safe for selling to Nigeria?
It shifts risk to banks, but you are paid only if your documents match the LC exactly. A confirmed LC adds a South African bank's undertaking.
Why does my Nigerian buyer pay in instalments?
Smaller buyers may be limited by how much foreign currency they can source or move at once from their accounts.
What is a Form M 'valid for FX'?
A Form M that allows the buyer to pay with foreign exchange bought on Nigeria's official market.
Sources
- Sterling Bank: Frequently asked questions on Form M (modified 13 Mar 2022) · accessed Oct 2026
- TheCable: CBN FX Manual 2026 (3 Jun 2026) · accessed Oct 2026
- SARB: Currency and Exchanges Manual for Authorised Dealers, section B.1 (8 Oct 2026) · 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.