The Central Bank of Nigeria has unveiled a new policy call “Naira for Dollar” to attract more Diaspora remittance into Nigeria's economy. The policy is set to commence by Monday, March 09, 2021, for the next 60 days from the assumed date. It will work such that every $1 US dollar received in Nigeria from Diaspora will earn the sender N5 naira.
This was according to t the circular the apex bank released on 5th March 2021 and directed to all money Deposit banks (DMBs), International Money Transfer Operators (IMTOs), and every interested member of the public saying this was to encourage the inflow of foreign exchange into the country.
The Trade and Exchange Department of the apex bank released the circular saying that the scheme was an incentive for all senders and recipients of all international money transfers.
By extension, all recipients of Diaspora remittance through the CBN IMOs shall henceforth enjoy the N5 for every dollar they remit as inflow.
In a like manner, the CBN shall through commercial banks, pay to remittance recipients the incentive of N5 for each $1 USD received and collected by the Nigerian beneficiary.
According to the circular, the recipients are at liberty to receive the N5 incentive whether they chose to collect the dollar through a counter or transferred it to their domiciliary account.
The circular added, “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.
“Please note that having discussed with banks and IMTOs, the scheme takes effect from Monday, March 8 and ends on Saturday, May 8, 2021,”
Nigerians in Diaspora remitting $30m weekly – CBN
In December 2020, the CBN has directed commercial banks to commence the Diaspora remittance policy, enabling bank customers to cash out money sent to them from abroad in dollars through money transfer platforms like money gram, Western Union Money Transfer among others.
Therefore this year, the policy has been resurrected to push for more Diaspora remittance to boost the forex in the country.
According to the apex bank report, Nigeria in Diaspora remit about $30million dollar weekly into the country.
This is about a 500% increase from the former $5million prior to the release of the incentive policy.
Commenting during the Diaspora Webinar series, the CBN Governor, Godwin Emifele stated that “We need to amplify the essence of the policy to reduce the cost burden of remitting funds to Nigeria by Nigerians in the Diaspora.
He disclosed that “First of all, for example, the average cost of sending $200 worth remittances to Nigeria from the US is roughly 4.7 percent. Studies have shown that even a 1 percent decrease in the cost of sending remittance can result in a significant boost in inflows.”
He sighted example that, in Pakistan for instance, the scheme is known as Free Send and has enabled a record amount of inflows of over $2billion monthly, even during the COVID-19 pandemic.