The Central Bank of Nigeria has promised to pay N5 for every dollar remitted through licensed International Money Transfer Operators into the country from March 8 to May 8, 2021, in an effort to increase remittance inflow for Nigeria.
The ‘CBN Naira 4 Dollar Scheme’ was announced in a circular signed by the Director, Trade and Exchange Department, A.S. Jibrin. The CBN governor, Godwin Emefiele, confirmed it while speaking at the Fidelity Bank Diaspora Forum.
“CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every $1 remitted by sender and collected by designated beneficiary. This incentive is to be paid to recipients, whether they choose to collect the dollar as cash across the counter in a bank or transfer same into their domiciliary account,” the circular read in part.
Emefiele said the apex bank’s policies on the administration of remittance flows were aimed at increasing the transparency of remittance inflows, reducing rent-seeking activities, and providing Nigerians in the diaspora with cheaper and more convenient ways of sending remittances to the country.
“In an effort to reduce the cost burden of remitting funds to Nigeria by Nigerians working in the Diaspora, the CBN has introduced a rebate of N5 for every $1 remitted to Nigeria, through IMTOs licensed by the bank. This rebate will be provided to the bank accounts of beneficiaries, following receipt of remittance inflows.
“We believe this new measure will help to make the process of sending remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora. This new policy is expected to take effect on March 8, 2021,” he stated.
According to him, the efforts at driving remittance inflows into Nigeria is expected to yield positive results, as the APX bank strives to ensure that formal banking channels offer cheaper, faster and more convenient ways for remitters to send funds to beneficiaries.
“In general, the new policy is expected to enlarge the scope and scale of foreign exchange inflows into the country with a view to stabilising the exchange rate and supporting accretion to external reserves. More importantly, it will provide an opportunity for Nigerians living abroad to make investments in their home country.
“We are brokering meetings between the IMTOs and banks to ensure a smooth transition.”
In June 2019, the Bangladeshi government launched an initiative to pay a percentage of the total amount remitted to beneficiaries in Bangladesh. This scheme helped to significantly improve remittance inflows. For example, between July 2019 and February 2020, Bangladesh received $12.5bn in inflows, reflecting monthly inflows of $1.5bn. Between July 2020 and February 2021, inflows using formal channels rose to $16.7bn reflecting average monthly inflows of $2.1bn per month notwithstanding the effect of the Coronavirus Disease on the global economy.
