IN what appears to be an intense effort to attract foreign currencies from abroad, the Central Bank of Nigeria (CBN) has directed that the nation’s currency, the naira, can now exchange for remittances from the diaspora.
The directive was contained in a circular dated July 10, 2023, signed by the CBN’s Director, Trade and Exchange Department, O. S. Nnaji.
Additionally, the apex bank mandated that in ascertaining the rate for such a naira payout, the foreign exchange rate from the investors and exporters (I&E) window be used.
The change implies that in addition to the already available options of receiving money in dollars or eNaira, beneficiaries of diaspora remittances will now also have the choice of receiving their funds in naira.
Nigeria’s diaspora remittance figure released by the Central Bank of Nigeria revealed that the country received a total of $952 million as direct remittances from Nigerians abroad between January and June this year.
The apex bank disclosed this in its International Payment just released. The half-year 2023 remittances represented a 21 per cent decline, compared to the $1.210 billion recorded in the same period last year.
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There is a growing concern on the diaspora remittance drop, with industry watchers saying having increased diaspora remittance would play a huge role in Nigeria’s foreign exchange unification policy.
The general public, deposit money banks, international money transfer operators (IMTOs), and other parties were all addressed in the circular.
The statement reads, “Further to the circular referenced TED/FEM/FPC/GEN/01/011 dated November 30, 2020, in respect of the above subject, the Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.
“Accordingly, all recipients of diaspora remittances through the CBN-approved IMTOs on the attached list shall henceforth have the option of receiving naira payment in addition to dollar and eNaira as payout options.
“For the avoidance of doubt, International Money Transfer Operators are required to pay out the proceeds using the Investor & Exporter’s window rate as the anchor rate on the day of the transaction.”
It noted that the regulation takes immediate effect and compliance is demanded.
The CBN also in the circular updated its list of registered International Monetary Transfer Operators (IMTOS) in the country.
It approved five additional IMTOs to facilitate diaspora remittances.
The ICIR had reported how huge the impact of diaspora funding would have on Nigeria’s foreign exchange unification policy if well harnessed.
Economic watchers believe that for a country to peg its currency against the dollar, there must be sufficient foreign reserves, and its export base must be well diversified. Nigeria is still lacking in the two, findings have shown.
“We must intensify efforts to improve the supply side of the dollar and attract more foreign direct investment into the economy. That way the supply will gradually stabilise demand,” the executive director of Cowry Assets Limited, Johnson Chukwu said.
Another knowledgeable expert, the Lead Director, Centre for Social Justice (CSJ), Eze Onyekpere, told The ICIR that a special purpose vehicle should be created for diasporans to shore up their remittances.
“The government must be strategic in engaging the diasporans so that their contribution can go beyond welfare and be impactful on the economy.”
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.