By John Ikani
The Central Bank of Nigeria (CBN) has issued a directive to International Money Transfer Operators (IMTOs) to initiate remittance pay-outs in both Naira and foreign exchange to beneficiaries.
The decision aims to provide recipients with more options for receiving their funds.
In accordance with the directive, the exchange rate for Naira pay-outs will be determined using the Investors and Exporters’ (I&E) window foreign exchange rate.
The CBN outlined this instruction in a circular dated July 10, 2023, referenced as FED/FEM/PUB/FPC/001/004 and signed by Dr. Ozoemena Nnaji, the Director of Trade and Exchange.
The circular builds upon a previous one issued on November 30, 2022 (reference: FED/FEM/FPC/01/011) that introduced guidelines for the payout policy of diaspora remittances.
The November 2022 circular enabled beneficiaries to receive their remittances in US Dollars through their chosen banks, granting them unrestricted access to their funds.
According to the latest circular, while Naira remains an option, beneficiaries can choose to receive their diaspora remittances in either United States Dollars or E-Naira, an electronic form of the Nigerian currency.
The circular states, “Further to the circular referenced FED/FEM/FPC/01/011 dated November 30, 2022, in respect of the above subject, the Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.
“Accordingly, all recipients of Diaspora remittances through the CBN-approved International Money Transfer Operators (IMTOs) on the attached list shall henceforth have the option of receiving Naira payment in addition to USD and e-Naira as payout options.
“For the avoidance of doubt, IMTOs are required to pay out the proceeds using the Investors’ & Exporters’ window rate as the anchor rate on the date of the transaction. The regulation takes effect immediately.”
It is worth recalling that the CBN recently unified all segments of the Nigerian forex market by consolidating all windows into the Investors & Exporters (I&E) window.
The measure was undertaken to enhance liquidity and stability in the market, with the goal of attracting foreign investors to bolster the Nigerian economy.
Additionally, last month, the apex bank discontinued the RT200 and Naira4dollar remittance schemes. The Naira4Dollar scheme, implemented in 2021, provided an incentive of N5 for every USD1 remitted and collected by the designated beneficiary through commercial banks.
The scheme successfully stimulated more remittances and ensured a consistent foreign exchange inflow into the country. On the other hand, the RT200 scheme aimed to achieve a foreign exchange repatriation of $200 billion within the next five years through non-oil exports.
