To encourage increased inflows of diaspora remittances into the country, the Central Bank of Nigeria (CBN) on Saturday announced the introduction of an incentive for senders and recipients of International Money Transfers (IMTO).
The incentive announced by the Trade and Exchange Department of the apex bank in a circular all deposit money banks (DMBs), International Money Transfer Operators (IMTOs) and the general public was titled: Introduction of the CBN’s “Naira 4 Dollar Scheme” for diaspora remittances.
Under the scheme, the CBN said all recipients of diaspora remittances through CBN licensed IMTOS shall henceforth be paid N5 for every dollar received as remittance inflow.
The circular signed by A.S.Jibrin on behalf of the Director Trade & Exchange Department stated in part: “In light of this, the CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every USD1 remitted by sender and collected by designated beneficiary.
“This incentive is to be paid to recipients whether they choose to collect the USD as cash across the counter in a bank or transfer same into their domiciliary account.
“In effect, a typical recipient of diaspora remittances will, at the point of collection, receive not only the USD sent from abroad, but also the additional N5 per USD received.”
The CBN said following the discussion with banks and IMTOs, the scheme, which would last for three months, takes effect from Monday, March 8, 2021 and ends on Saturday May 8, 2021.
In 2019, Nigeria recorded the highest direct remittances inflows into the country of about $17.6billion, from over $11.23billion in 2018.
However, as at September 2020, the CBN said diaspora remittances into Nigeria dropped by 27 percent, year-on-year to $12.9 billion.
The apex bank said the 27 percent decline was however 3.9 percentage points higher than the 23.1 percent decline projected by the World Bank for the Sub Sahara Africa region in 2020.
But the CBN said recently that its recent initiatives to boost foreign exchange transactions in the country yielded positive results, with weekly diaspora remittances into the country rising by 500 percent to $30million, from $5million.
In December 2020, the CBN governor Godwin Emefiele, put estimated annual remittance inflow from the Diaspora close to about $24billion.
He attributed the rise to some of the measures introduced by the apex bank to increase the flow of diaspora remittances into the country included using formal channels to reduce the diversion of foreign exchange by recalcitrant IMTOs, who thrived through various FOREX arbitrage schemes to the detriment of the country.