BY MARK ITSIBOR |
The Central Bank of Nigeria (CBN) has said its policy of recipients receiving their monies from abroad (new policy on diaspora remittance) will kick off today, December 4, 2020.
Briefing journalists in Abuja, the CBN Governor said some IMTOs have been in the habit of diversion of remittance flows, shortchanging recipients, thereby depleting dollar inflows in the nation’s foreign reserves.
The decision to kick start implementation of the new policy was reached at a stakeholders meeting between the CBN management led by Governor Godwin Emefiele, Deposit Money Banks (who serve as agent banks) and major International Money Transfer Operators (IMTOs). The meeting was held earlier yesterday.
As a result of these engagements which took place with major IMTOs and the DMBs, yesterday, Emefile reported that the stakeholders have committed that they would deploy all the necessary tools to ensure that these measures become effective from Friday, December 4, 2020.
“I therefore seize this opportunity to announce to Nigerians both at home and in the Diaspora that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020. All the IT systems of these IMTOs (Western Union, Moneygram and Ria services) and the DMBs have been properly configured to begin remittance tomorrow, Friday, December 4, 2020,” the CBN governor said yesterday.
Emefiele discarded fears that the move would encourage money laundering, saying “I am saying there would be some form of identification that makes it easy for those who are receiving funds to receive their monies. So the issue of money laundry in 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 account of the recipient, I belief money laundry issues would have been totally dealt with.”
The CBN had directed deposit money banks to close all Naira general ledgers through which the Naira remittances were hitherto being carried out. Recall the apex bank, on Wednesday, said the commercial banks must now allow the recipients/beneficiaries of diaspora remittances to decide whether to receive their cash in naira or United States Dollar. That was as part of effort to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria.
The CBN Governor said in the course of following up on the implementation of the aforementioned new policies, the CBN observed some pushback by some of the IMTOs who were bent on continuing their nefarious activities of undermining the Bank’s policy by attempting to resist the new policies.
The CBN believes that its new policy measures would help in providing a more convenient channel for Nigerians in the Diaspora to remit funds back to Nigeria, as well as ensure that the funds can contribute to the overall development of Nigeria’s economy.
According to official figures, Nigeria receives about $24 billion as diaspora remittances annually, an amount, Emefiele said is highly under remitted or does not reflect accruals into the official foreign reserves stock. “So we are hereby saying that if Nigeria is able to receive even if it is just $1bn monthly or moving close to 2bn monthly I’m so certain you all know what will happen to exchange rate in Nigeria. Second I am so certain that after sometime deposit money banks will not have any need to begin to call on the CBN to provide dollar to fund their commercial operation so that is why we are saying that we want to aggressively take on this and see how this will help our economy.”
“These changes are necessary to deepen the foreign exchange market, provide more liquidity, and create more transparency in the administration of Diaspora Remittances into Nigeria,” he stated.
In addition, Emefiele is optimistic that the changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that recipients of remittances would receive a market-reflective exchange rate for their inflows.
Emefiele assured all authorized dealers and the general public that beneficiaries of diaspora remittances will have unfettered access and utilization to such foreign currency proceeds, either in FX cash and/or in their domiciliary accounts.
The central bank in an effort to enable smooth implementation of the new policies, engaged with the commercial banks and the IMTOs to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice.
