The Naira4Dollar initiative of the Central Bank of Nigeria (CBN) has yielded positive results and this necessitated its extension indefinitely, BUKOLA IDOWU writes.
The Central Bank of Nigeria (CBN) last week extended the Naira4Dollar initiative indefinitely after the success of the two-month pilot phase which ended on May 8, 2021.
The policy was introduced in March this year by the CBN as part of efforts to encourage remittance inflow into the country, campaign which offers a rebate of N5 for every $1 remitted into the country.
With the policy, all recipients of diaspora remittances through CBN licensed International Money Transfer Operators are being paid N5 for every dollar that they receive as remittance inflow.
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The CBN governor, Godwin Emefiele, who believes the campaign will yield positive results, had noted that, the measure will encourage banks and financial institutions to develop products and investments vehicles, geared towards attracting investments from Nigerians in the diaspora.
“We have no doubt that these changes can help to finance a future stream of investment opportunities for Nigerians living abroad,” he said.
In addition to the policy, the CBN had also directed that banks pay and receive lower denominations of dollars. These two policies have seen an increase in the liquidity level of the naira, hence, the past few weeks, and the value of the naira had appreciated, selling between N480 and N478 on the streets.
This is because it pays for individuals receiving remittances from abroad as they get rewarded for every transaction. For example, a customer that receives $10,000 gets N50, 000 as reward. The N5 for a dollar incentive is paid to customers regardless of their preference to collect the dollars as cash across the counter or as transfer into the customers’ domiciliary accounts.
Speaking on the initiative, chief executive and managing director of First Bank Nigeria Limited, Dr. Adesola Adeduntan said, “At FirstBank, we are pleased to participate in the CBN’s ‘Naira 4 Dollar scheme’ as it will contribute to deepening financial inclusion in Nigeria. Indeed, it’s an activity we are pleased to lead, whilst promoting access to funds across the nooks and crannies of the country in almost 127 years of our existence.
“We are delighted to be a gateway to promoting dollar remittances into the country and we encourage our customers, their loved ones and friends to use our international money transfer services which would enable them to enjoy the rewards of this promo, sustaining the increase in inflows of diaspora remittances into Nigeria consequently help in poverty reduction, income redistribution and enhancement of economic growth.”
FirstBank pioneered international funds transfer and remittances over 25 years ago and has been at the forefront of promoting cross border payments in the country, having started the journey with Western Union Money Transfer. The bank’s wealth of experience and operation in over 750 locations nationwide gives it the edge in the market.
FBN had pioneered the money transfer business in Nigeria by ushering in the first ever IMTO in the country, Western Union International and also introduced the US Dollars Payout in 2002. In 2014, the bank pioneered the outbound service in Nigeria.
The recent CBN initiatives in the industry has brought about increased participation and new players. To this end, there are over 12 new IMTOs being on boarded as at the time of this report. IMTOs have presence all over the World, some of them have presence in over 250 countries around the world. They equally have stronghold in different parts.
For example, Western Union and MoneyGram have huge visibility in the United States of America, United Kingdom and Canada while Transfast is strong in the Middle East. What sometimes determine where the most foreign exchange flows in from is the number of Nigerians found in such a place, this further corroborates the fact that the USA, UK remains the strongest points wherein forex comes from.
To further encourage remittance through official channels, Adeduntan noted that when transfer is sent to a beneficiary’s naira account, the bank automatically opens a dollar account for the beneficiary and credit the dollar into the account. “We pay N5 for every Dollar received in line with the CBN directive and of course, our customers are at liberty to determine whether they want their USD as cash or directly into their accounts,” he said.