FX strategy for Nigerian startups earning in dollars

If you're running a Nigerian startup and your revenue comes in dollars—whether from international clients, SaaS subscriptions, or diaspora users—you're living in a permanent state of currency anxiety. The naira has weakened from around 411 to the dollar in early 2023 to well over 1,500 by 2026. That's not volatility you can ignore. Every dollar you earn is worth less in local currency each month, and every day you delay converting or hedging is a day you're exposed.

The real problem isn't just the weakness of the naira. It's that most founders don't have a deliberate FX strategy at all. They hold dollars in whatever account their payment processor gave them, convert when they feel like it, and hope the rate doesn't move against them before they need the cash. That's reactive. What you need is a system: where to hold dollars, when to convert, how much to hedge, and which rails to use so you're not bleeding money to spreads and fees.

By the end of this piece, you'll have a working FX playbook. You'll know which Nigerian banks and fintech platforms actually give you decent rates, how to think about hedging without needing a treasury team, and when to move between dollar accounts, stablecoins, and naira. This is the stuff that separates founders who stay lean from those who accidentally donate 5-10% of their revenue to currency slippage.

Why FX strategy matters for your unit economics

Let's start with the math. Say you're a B2B SaaS founder with 50 customers paying $500 per month each. That's $25,000 monthly revenue. At the official CBN rate (which you almost never get), that's roughly 37.5 million naira. But in practice:

• Your Paystack or Flutterwave account might quote you 1,510 to the dollar when the market rate is 1,505. That's a 5-naira spread per dollar, or 125,000 naira gone on a single month's revenue.
• If you wait three weeks to convert because you're busy, and the rate moves to 1,520, you've lost another 375,000 naira.
• If you convert to a personal account via a money changer at 1,490, thinking you're getting a better rate, you're actually worse off than the fintech spread—and now your company records are a mess.

Over a year, sloppy FX handling can cost you 1-2 million naira or more. For a pre-revenue or early-stage startup, that's operational runway. For a growing startup, that's hiring delays or feature delays.

The founders who get this right treat FX like a line item in their P&L. They know their blended cost of conversion, they know their exposure window (how long dollars sit unconverted), and they make deliberate choices about when to move money.

Where to hold dollars: accounts and platforms

You have several options for holding dollars before conversion. Each has trade-offs.

Fintech dollar accounts (Paystack, Flutterwave, Moniepoint)

Most Nigerian founders start here because it's automatic. When a customer pays via Paystack or Flutterwave, the dollars land in your merchant account. You can hold them there or convert to naira.

Pros:

• No friction. Revenue lands immediately.
• Conversion rates are typically 1-2 naira worse than interbank, but better than many alternatives.
• Easy integration with your accounting.

Cons:

• You're not earning interest on dollar balances (most fintechs don't offer this).
• Conversion rates vary between platforms and aren't always transparent until you initiate.
• Limited ability to move dollars out to other accounts without converting first.

For a detailed comparison of which platform gives you the best rates and features in 2026, see our Paystack vs Flutterwave vs Moniepoint breakdown.

Traditional bank dollar accounts

Banks like GTBank, Access, and Zenith offer corporate dollar accounts. You can receive international transfers directly or move dollars from fintech platforms.

Pros:

• You can hold larger amounts without hitting platform limits.
• Some banks offer dollar-denominated savings accounts with modest interest (typically 2-3% annually).
• More credible for B2B clients who want to send money via wire transfer.

Cons:

• Minimum balances often required (sometimes $5,000 or more).
• Conversion spreads are often wider than fintech (2-4 naira).
• Slower conversion process; you may need to visit a branch.
• Maintenance fees or account opening fees.

Stablecoin wallets (USDC, USDT)

This is the newer option. Platforms like Kuda, OPay, and crypto exchanges let you hold USDC or USDT. You can receive payments in stablecoin or convert dollars to stablecoin.

Pros:

• No FX exposure. 1 USDC = 1 USD always.
• Fast settlement to naira when you need it (often faster than bank transfers).
• Lower spreads than traditional banks in some cases.
• You can hold indefinitely without conversion.

Cons:

• Requires crypto wallet setup (small friction for non-technical founders).
• Stablecoin on-ramps and off-ramps still have spreads; not zero-cost.
• Regulatory uncertainty around stablecoins in Nigeria (though USDC and USDT are widely used).
• Not all clients are comfortable paying in stablecoin yet.

See our guide on stablecoin payments in Africa for more on adoption and practical use.

Building your FX strategy: three models

Now that you know where to hold dollars, here's how to think about converting them. Most founders fall into one of three patterns.

Model 1: Convert on receipt (high certainty, low complexity)

You convert dollars to naira as soon as revenue lands. This is the simplest approach.

When to use this:

• You have predictable monthly expenses in naira and need the cash flow.
• You're not comfortable with FX exposure.
• Your dollar revenue is small relative to your cash needs.

How to execute:

1. Revenue lands in Paystack/Flutterwave dollar account.
2. Within 1-2 days, you initiate conversion to naira.
3. Naira lands in your operating account.
4. Pay salaries, rent, suppliers in naira.

Cost: Typically 1-2% in spreads and fees per transaction.

Model 2: Hold for 30-90 days (moderate exposure, better rates)

You hold dollars for a month or three, converting when you have a specific need or when the rate looks favorable.

When to use this:

• You have a cash buffer in naira and can afford to wait.
• You want to reduce the number of conversions (fewer transactions = fewer spreads).
• You're willing to watch the market a bit.

How to execute:

1. Revenue lands in a dollar account (fintech or bank).
2. You monitor the daily naira rate for 2-4 weeks.
3. When you need naira or the rate looks good (naira strengthens), you convert.
4. Batch conversions: instead of converting $500 weekly, convert $2,000 monthly.

Cost: Typically 0.5-1.5% in spreads, but fewer total transactions.

Risk: If the naira weakens unexpectedly, you lose. In 2024-2026, the naira has been generally weakening, so this has been painful. But in a strengthening period, you win.

Model 3: Hedge and split (sophisticated, lower overall cost)

You hold some dollars, convert some to naira, and keep some in stablecoin. You're hedging your exposure.

When to use this:

• You have significant dollar revenue and large naira expenses.
• You want to reduce FX volatility in your P&L.
• You're comfortable with a bit more operational complexity.

How to execute:

1. 50% of monthly revenue: convert immediately to naira (covers essential expenses).
2. 30% of monthly revenue: hold in dollar account or stablecoin (covers future dollar-denominated costs or buffer).
3. 20% of monthly revenue: convert to stablecoin as a hedge (can convert quickly if naira drops sharply).

Cost: Blended cost of 1-2%, but you reduce downside risk.

The exact split depends on your expense mix. If 70% of your costs are in naira and 30% are in dollars (e.g., cloud hosting, third-party APIs), you might convert 70% and hold 30%.

The mechanics: how to actually move money

Once you've decided on your strategy, you need to know the rails.

Fintech-to-bank conversion

Paystack → your bank account:

1. Log into Paystack dashboard.
2. Go to Payouts or Transfers.
3. Enter your bank details and amount (in naira).
4. Confirm the rate; it updates in real-time.
5. Funds arrive in 1-5 minutes (usually instant).

Same process for Flutterwave, Moniepoint.

Spreads: 1-2 naira per dollar.

Bank-to-bank dollar transfer

If you're moving dollars between your own accounts (e.g., GTBank dollar account to another bank):

1. Initiate a local dollar transfer via your bank's app or branch.
2. This is faster and cheaper than international wire.
3. Spreads are typically 3-5 naira per dollar.

Stablecoin conversion

If you're using stablecoin:

1. Receive USDC/USDT payment (via payment processor, direct wallet transfer, or bridge from dollar account).
2. Hold in your wallet (Kuda, OPay, Exodus, MetaMask, etc.).
3. When ready to convert: use the platform's off-ramp or a DEX (decentralized exchange).
4. Naira arrives in your bank account.

Spreads: Often 1-3% on the full transaction, but no FX spread per se (since USDC/USDT are already 1:1).

Money changer (not recommended, but common)

Many founders still use money changers for larger conversions, thinking they'll get better rates. They usually don't, and you lose audit trail.

Spreads: 0.5-2 naira better than fintech in theory, but inconsistent. Plus, your company records get messy.

Recommendation: Stick to regulated platforms (fintech, banks, licensed crypto exchanges). The rate difference is small, and compliance matters.

Handling the volatility: when to move fast

The naira can move 20-30 naira in a single week. Here's how to respond.

If the naira weakens suddenly (e.g., 1,500 → 1,520 in a day):

• You're now earning 20 naira less per dollar.
• If you have a large dollar balance sitting unconverted, you've lost money on paper.
• Decision: do you convert faster to lock in the current rate, or do you wait and hope it strengthens back?
• Best practice: if you need the naira anyway, convert. If you don't, hold (you're not forced to sell at a bad rate).

If the naira strengthens (e.g., 1,520 → 1,510):

• You're earning 10 naira more per dollar.
• If you were planning to convert this week anyway, this is a good time.
• Don't chase every tick; the transaction cost often exceeds the gain.

If there's a sudden policy announcement (e.g., CBN intervention, import restrictions):

• The naira can move 50+ naira in hours.
• This is when having a stablecoin buffer helps (you're not forced to convert at a terrible rate).
• If you see a policy announcement and you have large dollar holdings, consider converting 20-30% to stablecoin immediately as a hedge.

Real example: diaspora remittance and cross-border payments

Many Nigerian startups also receive money from diaspora users or international partners. The FX dynamics are slightly different here.

If you're a payments or remittance startup (like many on LaunchPad), you're essentially arbitraging FX. Your users send dollars from abroad; you convert to naira and pay out locally. Your margin is the spread.

For example, Ajo and other diaspora-focused platforms have to manage FX tightly. A 0.5% spread difference on 1,000 transactions per day is significant.

See our deep dive on how diaspora Nigerians actually send money home in 2026 for more on this.

Tax and accounting implications

One thing founders often miss: FX gains and losses are taxable.

• If you hold $10,000 at 1,500 naira per dollar, then convert at 1,510, you've made a 100,000 naira gain. That's taxable income.
• Conversely, if you convert at 1,490, that's a 100,000 naira loss, which you can offset against other income.
• Your accountant needs to track this. Don't just convert ad-hoc and hope it goes unnoticed.

Best practice:

1. Keep a log of every conversion: date, amount in dollars, rate, amount in naira.
2. Calculate realized gains/losses monthly.
3. Report to your accountant or tax advisor quarterly.
4. Consider using your losses to offset gains in other areas.

This is especially important if you're operating under NDPR (Nigerian Data Protection Regulation) compliance and need audit trails anyway.

Tools and alerts to stay on top of it

You don't need to watch the market all day, but you should have alerts.

• Set rate alerts: Most fintech platforms (Paystack, Flutterwave) have APIs you can query for current rates. Set a Slack alert if the rate moves beyond your threshold (e.g., alert if naira weakens beyond 1,510).
• Use a spreadsheet tracker: Log every conversion with date, rate, and amount. This doubles as your tax record.
• Check CBN rates daily: The CBN publishes official rates. They're often 20-50 naira away from market rates, but they're a reference point.
• Join founder Slack groups: Yaba Tech, Lekki founders, Kano tech communities often share real-time rate observations.

Mistakes to avoid

1. Converting all at once: If you have $50,000 in revenue and convert it all on the same day, you're exposed to one-day rate risk. Split conversions across 2-3 days.
2. Holding too much in one account type: If Paystack has a service issue and you can't access your dollars, you're stuck. Diversify across platforms.
3. Ignoring stablecoin: Even if you don't use stablecoin as your primary holding, keep 10-20% in USDC as an emergency hedge. It costs almost nothing.
4. Not documenting: Every conversion should be logged. This is non-negotiable for tax and audit purposes.
5. Chasing the rate: Don't convert every time the rate moves 1 naira. Set a threshold (e.g., convert when the rate hits 1,510 or you need cash), and stick to it.

FAQ

Q: Should I convert all my dollar revenue immediately or hold and wait for a better rate? A: It depends on your cash needs and risk tolerance. If you need naira for salaries and expenses, convert what you need immediately. If you have a buffer, holding for 30-90 days and batching conversions can reduce your blended cost. Don't try to time the market perfectly; the transaction cost often exceeds the gain.

Q: What's the difference between the Paystack rate and the "market rate" I see online? A: Fintech platforms apply a spread (typically 1-2 naira per dollar) to their quoted rate. This is their fee. The "market rate" you see online (e.g., on XE.com or Bloomberg) is the interbank rate, which is what banks trade at. You almost never get the true interbank rate as a business; the spread is how platforms make money. Paystack and Flutterwave spreads are competitive; traditional banks are often wider.

Q: Is it safer to hold dollars or stablecoin? A: Stablecoin (USDC, USDT) is safer from FX risk because 1 USDC always equals 1 USD. But it introduces counterparty risk (what if the stablecoin issuer fails?) and regulatory risk (Nigeria's stance on crypto is still evolving). For most startups, a mix is best: 70% in dollars (fintech or bank account), 30% in stablecoin.

Q: Do I need to hire a treasurer or FX specialist? A: Not until you're doing $50,000+ monthly in revenue. Until then, the strategy in this article and a simple spreadsheet tracker are enough. Once you hit that scale, consider hiring a part-time finance person or outsourcing to a CFO service.

Q: What happens if the naira weakens 10% in a month? A: If you're holding dollars, you win (your dollars are worth more naira). If you've converted to naira, you lose. This is why the hedge strategy (holding some dollars, converting some) works: you're not betting entirely on naira strength or weakness. In 2024-2026, the naira has been weakening, so founders holding dollars have generally done better.

What to do next

1. Audit your current setup: Log into your Paystack, Flutterwave, or bank accounts and see exactly how much you're holding in dollars and at what rate you last converted. This is your baseline.
2. Pick a model: Choose one of the three strategies above (convert on receipt, hold 30-90 days, or hedge and split) based on your cash needs and risk tolerance. Write it down.
3. Set up tracking: Create a simple Google Sheet with columns for date, dollar amount, rate, naira amount, and platform. Log your next three conversions. This is your tax record and your feedback loop.
4. Explore stablecoin: If you haven't already, open a Kuda or OPay account and try receiving a test payment in USDC. Understand the mechanics before you need them.

For more on payment processors and how they handle FX, see Paystack vs Flutterwave vs Moniepoint in 2026. If you're building a diaspora-facing product, How diaspora Nigerians actually send money home in 2026 is essential reading.