BY SEYIFUNMI LUMEKO
As you read this news features, many Nigerians are ignorant of the Central Bank of Nigeria, CBN monetary policy on Naira for Dollars which commenced today 8 March, 2021.
The Naira for Dollar CBN policy is designed for for Nigerians living abroad and their relatives living in Nigeria.
The CBN new policy sates that recipients of diaspora remittances through CBN’s International Money Transfer operators, IMTOs will be paid Five Naira (N5) for every One Dollar ($1) received as remittance inflow, in the next three months.
You will recall that many banks throughout the weekend sensitized their customers by SMS, email and adverts on their preparedness to commence the implementation of the policy on Monday.
Banks believe that the policy would attract as many remittance receivers as possible before the scheme ends on Saturday, May 8, 2021.
CBN Governor Godwin Emefiele, quoting World Bank statistics, said over the weekend that Nigeria received a total of $21 billion in Diaspora remittances in 2019, making the country the seventh-largest recipient of remittances globally.
Speaking at a virtual foreign exchange policy forum organised by Fidelity Bank, on Saturday, Emefiele, said the World Bank report showed that remittance flows to low and middle-income countries reached a record high of $548 billion in 2019.
He said although official remittance flows declined in 2020, due largely to the undermining impact of the COVID-19 pandemic, it maintained its dominance over Foreign Direct Investment inflows, adding that remittance surpassed FDI flows of $534 billion and overseas development assistance of about $166 billion in 2019.
Consistent with the global trend, he explained, Nigeria aspires to ensure that remittance flows and diaspora investments become a significant source of external financing.
“Over the years, foreign direct investments and, more noticeably, portfolio flows to Nigeria have exhibited volatilities, the reversals of which exert enormous pressures on domestic market conditions. Hence the need to boost remittance flow”, he further explained.
Emefiele gave this as the reason for the introduction of the ‘CBN Naira 4 dollar scheme,’ saying it was designed to reduce the cost burden of remitting funds to Nigeria by diasporans.
He said CBN was of the belief that the new scheme will help to make the process of sending remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora, noting that the policy us also aimed at increasing the transparency of remittance inflows, reducing rent-seeking activities, and providing Nigerians in the diaspora with cheaper and more convenient ways of sending remittances to Nigeria.
The Governor said reducing the cost of sending remittances is a significant way to boost remittance inflows to Nigeria and the new policy is expected to enlarge the scope and scale of foreign exchange inflows into the country with a view to stabilizing the exchange rate and supporting accretion to external reserves.
Last December, CBN introduced a new policy on diaspora remittances to ensure that recipients of funds via monies IMTOs like Western Union, Moneygram and Ria Services as well as banks were paid in the foreign currency remitted.
The CBN Governor said at that time that, “We believe that these new policy measures would help in providing a more convenient channel for Nigerians in the Diaspora to remit funds back to Nigeria, as well as ensure that these funds can contribute to the overall development of our economy”.