As part of its incentives to boost the inflow of foreign currency in the country, the Central Bank of Nigeria (CBN) on Saturday introduced a reward of N5 for every $1 of fund remitted to Nigeria through International Money Transfer Organisations in its new forex policy.
The CBN announced the new policy in a circular to all deposit money banks, International Money Transfer Operators (IMTOs), and the public in general.
In the document dated March 5, 2021, and signed by its Director of Trade and Exchange Department, A.S. Jibrin, the apex bank explained that the scheme was an incentive for senders and recipients of international money transfers.
Accordingly, it noted that all recipients of diaspora remittances through IMTOs licensed by the nation’s financial regulator would henceforth be paid N5 for every 1$ received as remittance inflow.
The CBN added that the incentive of N5 for every $1 remitted by the sender and collected by the designated beneficiary would be paid through the commercial banks in Nigeria.
According to it, the incentive is to be paid to recipients whether they choose to collect the USD as cash across the counter in a bank or transfer the same into their domiciliary account.
The apex bank stated that it had discussed the new development with banks and IMTOs, saying the scheme would take effect from 8 March and end on 8 May 2021.
As part of its reforms to boost the inflow of foreign currency in the country, the CBN introduced dollar payout last year. Since 4 December 2020, agents of international money transfer companies are obliged to pay recipients of money sent to Nigeria from abroad in dollars.
According to CBN Governor, Godwin Emefiele, efforts at driving remittance inflows into Nigeria would yield positive results as it continued to ensure formal banking channels offer cheaper, faster and more convenient ways for remitters to send funds to beneficiaries.
“Today, the World Bank data shows that Nigeria, with a total flow of $21bn, was the seventh largest recipient of remittances in 2019,” Emefiele said.
“This is behind India, China, and even Egypt. Though official remittance flows declined in 2020 due largely to the undermining impact of the Covid-19 pandemic, it maintained its dominance over FDI inflows.”
Forecast by PricewaterhouseCoopers, one of the big four accounting firms, had suggested that Nigeria’s remittance flows could reach $34.89bn by 2023 if government policies were right.
The report revealed that as of 2017, the highest remittances came from the United States, followed by the United Kingdom, Cameroon, Italy, Ghana, Spain, Germany, Benin Republic, Ireland and Canada.