Yes, it likely would—but with some nuances. Here’s the breakdown:
Mechanism:
Currently, many Nigerians abroad send money in dollars through IMTOs. Recipients often sell those dollars on the parallel market to get naira at rates higher than the official rate.
If IMTOs start paying only in naira, those recipients no longer have dollars in hand to sell. This removes a portion of the demand for dollars on the black market.
Effect on black market:
With less physical dollars circulating, the parallel market demand could drop, which may ease pressure on the naira and slow its depreciation.
However, it doesn’t eliminate all dollar demand. Businesses and individuals still need dollars for imports, travel, and other transactions.
Caveats:
Some people might find alternative ways to access dollars (e.g., via friends abroad or less regulated channels).
If the naira remains overvalued officially or if dollar scarcity persists, black market activity might just shift rather than shrink.
Bottom line: Paying remittances in naira can reduce black market dollar demand somewhat, giving the naira temporary relief, but it’s not a guaranteed fix for long-term currency
stability.
