Banks can now pay diaspora remittances in naira, E-Naira, US dollars
By Jeph Ajobaju, Chief Copy Editor
Banks and International Money Transfer Operators (IMTOs) can now pay diaspora remittances in both naira and foreign currency, the Central Bank of Nigeria (CBN) has directed, as party of measures to liberalise the foreign exchange (forex) market and shore up the value of the local currency.
The Investors and Exporters’ (I&E) window forex rate should be used in determining the exchange rate for naira payouts, the CBN explained in a circular issued by its Director of Trade and Exchange, Ozoemena Nnaji.
It said the decision is in furtherance to an earlier circular dated 30 November 2022 which provided guidelines on the payout policy of diaspora remittances to beneficiaries.
The previous circular introduced the payment of dollars to beneficiaries of diaspora remittances through the designated bank of their choice with unrestricted access to their funds.
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Naira payment one of three options
The new circular clarifies naira payment is only an option in addition to payment in United States dollars and E-Naira in receiving diaspora remittances.
“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,” the circular said, per reporting by Vanguard.
“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.”
The CBN last month announced unification of all segments of the forex market by collapsing all windows into the I&E window, and it also stopped the RT200 and the Naira4dollar remittance schemes.
The moves are part of the efforts of the new administration to improve liquidity and stability in the forex market by attracting foreign investors to the Nigerian economy.
Under the RT200 and the Naira4dollar remittance schemes introduced in 2021, the CBN through commercial banks paid diaspora remittance recipients N5 for every US dollar remitted and collected by a beneficiary.
The Naira4Dollar scheme incentivised remittances from Nigerians living abroad and was indeed considered successful, as it encouraged more remittances and steady forex inflow into the country.
The RT200 was designed to increase treasury earnings exclusively from non-oil exports to $200 billion in forex repatriation within five years.
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