The Central Bank of Nigeria (CBN) recently implemented a policy aimed at simplifying the remittance process for its citizens. The new regulations now allow recipients to be paid out in Naira in addition to foreign exchange, providing more flexible payout options. Furthermore, the CBN stipulated that the exchange rate for such Naira pay-outs should align with the Investors and Exporters’ Window foreign exchange rate.
The adjustment was supposed to enhance the previously issued guidelines on diaspora remittance payouts. The prior policy facilitated the transfer of dollars to beneficiaries through International Money Transfer Operators (IMTO), via the recipient’s chosen bank, providing unrestricted access to funds.
The enhanced policy offered an expanded range of payout options, including payments in United States Dollars, E-Naira, or the local Naira currency. This strategy was part of CBN’s commitment to streamline remittance payments and enhance accessibility for beneficiaries. It was anticipated that the modifications would promote greater transparency in the foreign exchange market while reducing remittance costs.
Ex CBN Governor, Godwin Emefiele, highlighted that the policy reform aimed to boost efficiency and transparency within the foreign exchange market. Additionally, he indicated that the revised guidelines are designed to incentivize more Nigerians abroad to remit funds home and concurrently reduce associated costs.
According to the World Bank, Nigeria is among the top recipients of remittances worldwide, with an estimated inflow of $25.08 billion in 2021. Therefore, the updated CBN policy was expected to facilitate easier remittances for Nigerians abroad, reducing both the complexities and costs associated with sending money home.
Beyond these measures, the CBN had launched initiatives to stimulate remittances. For example, in December 2020, they unveiled the a “Naira 4 Dollar Scheme”, which offered an incentive of N5 for every $1 remitted via licensed IMTOs. The intention behind this initiative was to further motivate Nigerians living abroad to remit funds home.
The CBN’s progressive payout policy for diaspora remittances symbolised a significant step towards simplifying remittance payments and enhancing accessibility. It was anticipated that those measures will encourage more Nigerians abroad to remit funds back to Nigeria, thereby boosting the country’s economy.
