Despite an estimated annual diaspora remittance of $24 billion, international money transfer operators (IMTO) have been shortchanging recipients by delivering in local currency and using the hard currency to attack the naira.
Central Bank of Nigeria (CBN), met with major IMTOs and banks on Thursday where the two group of stakeholders committed that they would deploy all the necessary tools to ensure that new measures on diaspora remittances become effective from Friday, December 4, 2020.
Governor of Central Bank of Nigeria (CBN) Mr Godwin Emefiele at a press conference on improving remittance Inflows into Nigeria on Thursday said “we analyzed data on IMTO inflows into the country over the past year, and through our investigations discovered that some IMTOs, rather than compete on improving transaction volumes and create more efficient ways for Nigerians in the Diaspora to remit funds, resorted to engaging in arbitrage arrangements on the naira-dollar exchange rate, which to a large extent resulted in a significant drop in flows into the country.”
He explained that given the estimated annual remittance inflow of close to $24bn, which could help in improving the country’s balance of payment position, reduce her dependence on external borrowing and mitigate the impact of COVID-19 on foreign exchange inflows into the country, CBN had been seeking ways to support improved remittance inflows into the country through official channels.
According to him, part of efforts to boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient flow of remittances back to Nigeria was the new policy announced early this week allowing beneficiaries of diaspora remittances through IMTOs to henceforth receive such inflows in US Dollars through the designated bank of their choice.
“Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.”
Emefiele said the changes would deepen the foreign exchange market, provide more liquidity, and create more transparency in the administration of Diaspora Remittances into Nigeria.
“In addition, these changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that recipients of remittances would receive a market-reflective exchange rate for their inflows.
“All Authorized Dealers and the general public should note that beneficiaries shall have unfettered access and utilization to such foreign currency proceeds, either in FX cash and/or in their Domiciliary Accounts, in line with our circular TED/FEM/FPC/ GEN/01/010.”
