In a significant development, the Central Bank of Nigeria (CBN) has announced the inclusion of the naira, the country’s legal tender, as a payout option for diaspora remittances.
This move aims to provide more flexibility to recipients and facilitate the efficient transfer of funds.
The apex bank, through a circular dated July 10, 2023, signed by O.S. Nnaji, Director of the Trade & Exchange Department, CBN, directed that the investors and exporters (I&E) window foreign exchange rate should be used to determine the rate for the naira payout.
With this new directive, recipients of diaspora remittances will now have the option to receive their proceeds in naira, in addition to the existing choices of dollar and eNaira.
The circular, addressed to deposit money banks, international money transfer operators (IMTOs), and the general public, stated, “Further to the circular referenced TED/FEM/FPC/GEN/01/011 dated November 30, 2020, 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.”
It further elaborated, “Accordingly, all recipients of diaspora remittances through the CBN-approved IMTOs on the attached list shall henceforth have the option of receiving naira payment in addition to USD and eNaira as payout options. For the avoidance of doubt, International Money Transfer Operators are required to pay out the proceeds using the Investor & Exporter’s window rate as the anchor rate on the day of the transaction.”
The directive takes immediate effect, and strict compliance is expected from all stakeholders involved.
Moreover, alongside this directive, the CBN also updated its list of registered international money transfer operators (IMTOs) in the country, expanding it from 57 IMTOs in April 2021 to 62.
These IMTOs play a vital role in accepting cash for the purpose of transmitting it to individuals residing in Nigeria or other countries. They also provide cross-border transfer services for personal purposes, such as money transfer services for family maintenance and money transfer services for foreign tourists visiting Nigeria.
The CBN’s approval has extended to five additional IMTOs, namely CSL Pay Limited, e-2-e Pay Limited, LeadRemit Limited, Lycamoney Financial Services Limited, and SimbaPay Limited. Their inclusion aims to enhance the diaspora remittance process and ensure a smooth flow of funds for individuals and families.
The CBN’s decision to include the naira as a payout option for diaspora remittances signifies a proactive step in streamlining the remittance process and providing recipients with more choices. This move is expected to contribute to the growth of the Nigerian economy by encouraging the inflow of funds and boosting financial inclusivity.
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