CBN targets $2b monthly diaspora remittances
The Central Bank of Nigeria (CBN) is targeting $2 billion monthly from diaspora remittances. This follows the introduction of the diaspora forex remittances policy by the apex bank.
CBN Governor Godwin Emefiele dropped the hint at a news conference on the new policy in Abuja on Thursday.
Using Pakistan as an example, Emefiele said: “If Nigeria is able to receive – even if it is – just $1 billion monthly or moving close to $2 billion monthly, I’m so certain you all know what will happen to exchange rate in Nigeria.”
If the $2 billion target is met, Emefiele said he is certain “that after sometime deposit money banks will not have any need to begin to call on the CBN to provide dollar to fund their commercial operation so that is why we are saying that we want to aggressively take on this and see how this will help our economy.
“Nigerians, both at home and in the Diaspora, are being assured that the policy of recipients receiving their monies from abroad will kick off today (December 4, 2020.”
Blocking any loopholes to manipulate the policy, the Central Bank of Nigeria (CBN) has ordered all Deposit Money Banks (DMBs) in the country to close all their Naira General Ledger through which the Naira remittances were hitherto being carried out.
The CBN said it took the decision following resistance from International Money Transfer Operators (IMTOs) over its new decision on diaspora remittances.
Emefiele said: “The CBN observed some push back by some of the IMTOs who were bent on continuing their nefarious activities of undermining our policy by attempting to resist the new policies.”
As a result of the push back, the CBN on Wednesday, ordered that “all DMBs must close all Naira General Ledgers through which the Naira remittances were hitherto being carried out”.
To enable smooth implementation of the new policy on diaspora remittances, the CBN engaged commercial banks and major IMTOs “to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice”.
Following the meeting between the CBN, DMBs and IMTOs, it was learnt that “the stakeholders have agreed that they would deploy all the necessary tools to ensure that these measures become effective from (today) Friday, December 4, 2020”.
All the Information Technology (IT) systems of these IMTOs (Western Union, Moneygram and Ria services) and the DMBs, the CBN boss said, “have been properly configured to begin remittance tomorrow, Friday, December 4, 2020”.
“These new measures”, he added, “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.”
Before taking the diaspora remittances decision, the CBN said it analysed data on IMTO inflows into the country over the past year, “and through our investigations discovered that 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 in flows 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.
“As a result of these infractions, the Central Bank of Nigeria, on November 30, announced a new policy initiative to boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient flow of remittances back to Nigeria.”
On whether the policy will 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 laundry.
“Here in Nigeria, those who will be receiving those funds will come with some form of identification cards and today, we even have BVN.
“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 those who are receiving funds to receive their monies.
“Banks have their Know Your Customer (KYC) and over time, we will try and encourage situations where funds are flowing into the domiciliary account of the recipients, I belief money laundry issues would have been totally dealt with.”
