The Central Bank of Nigeria (CBN) is targeting about $2billion monthly as diaspora remittances with the latest foreign exchange policy which amended procedures for receiving money from abroad.
The new policy will commence on Friday, December 4, 2020, CBN governor, Godwin Emefiele confirmed on Thursday in Abuja after a series of engagements with major International Money Transfer Operators (IMTOs) and Deposit Money Banks who committed to deploying all the necessary tools to ensure effective implementation of the new measures.
The CBN had on Wednesday ordered all DMBs to close all their Naira General Ledgers through which local currency remittances were being carried out.
The decision followed some pushback by some of the IMTOs who were bent on continuing their nefarious activities of undermining the new remittance policies.
Citing Pakistan as an example, Emefiele said, if Nigeria is able to receive “even if it is just $1billion monthly or moving close to $2billion monthly,” the naira exchange rate would strengthen.
Emefiele further believes that if the $2billion target is met, the banks would no longer have the need to request dollars from the CBN to fund their commercial operations.
“That is why we want to aggressively take on this and see how this will help our economy,” he stressed.
He further announced to Nigerians both at home and in the Diaspora, “that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020.
“All the IT systems of these IMTOs (Western Union, Moneygram, and Ria services) and the DMBs have been properly configured to begin remittance tomorrow, Friday, December 4, 2020,” he assured.
He raised the optimism that these new policy measures would help in providing a more convenient channel for Nigerians in the Diaspora to remit funds back home, as well as ensure that these funds can contribute to the overall economic development.
He said before taking the decision on diaspora remittances, the CBN analysed data on IMTO inflows into the country over the past year.
He said investigations showed how some IMTOs, rather than compete on improving transaction volumes and create more efficient ways for Nigerians in the Diaspora to remit funds, resorted to engaging in arbitrage arrangements on the naira-dollar exchange rate, which to a large extent resulted in a significant drop inflow into the country.
“The activities of the IMTOs also encouraged the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria, thereby undermining our Foreign Exchange management framework,” the governor stressed.
Asked if the new policy would guard against money laundering, the CBN governor said: “I want you to know that even from abroad where these funds are coming – Western Union, Ria, and Moneygram are properly licensed and regulated and I know for certain that institutions or countries where they are domiciled abroad would not allow money laundering practices or remittance of funds in those countries into our country to be associated with money laundering”.
He said here in Nigeria, recipients of those funds would be expected to come with some form of identification, with the BVN providing additional security.
“I am not saying that BVN is compulsory for you to collect dollars over the counter but I am saying there would be some form of identification that makes it easy for people to receive their monies”.
He added that leveraging banks’ Know Your Customer (KYC) platform, the CBN will, over time encourage situations where funds flow directly into the domiciliary accounts of the recipients.
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