In a recent circular, the Central Bank of Nigeria (CBN) has instructed International Money Transfer Operators (IMTOs) to offer remittance pay-outs in Naira to beneficiaries, in addition to foreign exchange.
This directive also includes the utilization of the Investors’ and Exporters’ Window foreign exchange rate to determine the rate for Naira payouts.
The circular, dated July 10, 2023, and referenced as FED/FEM/PUB/FPC/001/004, was issued by Dr. Ozoemena Nnaji, the Director of Trade and Exchange at the CBN. It serves as an extension of a previous circular dated November 30, 2022 (reference number: FED/FEM/FPC/01/011), which outlined guidelines for the payout policy of Diaspora remittances to beneficiaries in Nigeria.
The November 30, 2022 circular introduced the payment of dollars to beneficiaries of diaspora remittances through IMTOs via their chosen designated banks, allowing unrestricted access to the funds. The new circular now offers the Naira as an additional option, alongside the United States Dollars and E-Naira, for receiving Diaspora remittances.
The circular states, “Further to the circular referenced FED/FEM/FPC/01/011 dated November 30, 2022, regarding the subject mentioned above, the Central Bank of Nigeria hereby announces Naira as a payout option for proceeds from International Money Transfers.
Accordingly, all recipients of Diaspora remittances through the CBN-approved International Money Transfer Operators (IMTOs) listed in the attachment shall now have the option of receiving Naira payment, in addition to USD and e-Naira.”
To ensure clarity, the circular highlights that IMTOs must process the pay-outs using the Investors’ & Exporters’ window rate as the anchor rate on the transaction date. This regulation is effective immediately.
Last month, the apex bank discontinued the RT200 program and the Naira4dollar remittance scheme. Introduced in 2021, the Naira4Dollar scheme provided an incentive of N5 for every USD1 remitted by the sender and received by the designated beneficiary, facilitated through commercial banks.
The scheme successfully encouraged more remittances and steady foreign exchange inflows into the country.
The RT200 program, consisting of various plans, policies, and programs, aimed to boost the nation’s earnings exclusively from non-oil exports, with the target of $200 billion in foreign exchange repatriation within the next five years.
