Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, on Thursday said that the apex bank was eyeing close to $2 billion monthly from diaspora remittance, a development that has prompted it to unveil new policy measures in the country’s remittance programme.
This is as commercial banks have been ordered by the apex bank to pay recipients of offshore remittance in United States dollars and no longer in naira equivalent with effect from Friday, December 4.
The beneficiaries can either receive the dollars by cash across the bank’s counter or through their domiciliary accounts.
Speaking at a media briefing in Abuja on Thursday, Emefiele said that the new measures sprang from internal review of the operations of International Money Transfer Operators (IMTO) in the country and the potential impact improved flows could have on the economy.
He said: “I’m aware from the data available that for instance Pakistan even in the midst of COVID-19 receives $2 billion monthly from flows from Pakistani in diaspora. This is a country that I will say by geography, demographic is about the same with Nigeria.
“So, we are hereby saying that 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.
“Secondly, I am so certain that after sometime, the deposit money banks will not have any need to begin to call on the CBN to provide dollar to fund their commercial operations; so that is why we are saying that we want to aggressively take on this and see how this will help our economy”.
On the possibility of the new rule promoting money laundering, Emefiele dismissed such insinuations, explaining that offshore IMTO operators like Western Union, MoneyGram and RIA are properly licensed and regulated.
“I know for certain that institutions where or countries where they are domiciled abroad would not allow money laundry practices or remittance of funds in those countries into our contry to be associated with money laundry. In our part here, most of those will be receiving those funds, they come with some form of identity card that are verifiable and traceable”.
So, the issue of money laundering in my view really does not arise because banks have their KYC and because, over time, we will try and encourage situations where funds are flowing into the domiciliary accounts of the recipient, I belief money laundering issues would have been totally dealt with”.
The CBN Governor further revealed that the new policy measure has led to 65 International Money Transfer Operators being licensed by the CBN for inbound remittances.
“Based on this premise, we analyzed 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. It 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, in an effort to boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient flow of remittances back to Nigeria, the Central Bank of Nigeria, on November 30, 2020, announced a new policy initiative, which would help to support these objectives. Please permit me to apprise you with the content of the new policy measures”, he added.
– The Sun