All you need to know about the new CBN Naira for dollar policy

Florence Uwaeme

Have you heard about the new Central Bank of Nigeria’s Naira for Dollar scheme? Here are all you need to know about the new scheme in layman’s English.

Well, the Central Bank of Nigeria announced via a secular released on March 5th 202 to Deposit money banks (DMB) and International Money Transfer Operators (IMTOs) that for every dollar remitted from recognized international money transfer operators (IMTOs) from any part of the world to Nigeria, there will be an incentive of 5Naira per dollar. What this means is that if your relative in the diaspora sends you 100 hundred dollars, for instance, you’ll have to multiple 100×5=500. You’ll be getting an extra 500 plus your exchange equivalent of the money sent.

The apex bank had said that consistent with the global trend, Nigeria aspires to ensure that remittance flows and diaspora investments become a significant source of external financing.

“CBN strives to constantly improve our remittance infrastructure, ease the process of international money transfer and simplify the experience for senders and recipients.

“In an effort to reduce the cost burden of remitting funds to Nigeria by working Nigerians in the Diaspora, the Central Bank of Nigeria has introduced a rebate of N5 for every $1 of fund remitted to Nigeria, through IMTOs licensed by the Central Bank. The Scheme will take effect on the 8th of March 2021.

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“We believe this new measure will help to make the process of sending remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora.

“New FX policy will create an easier, more flexible, and more transparent, system of remittance administration, it will greatly enhance the benefits of diaspora remittances in supporting investments and growth in Nigeria.

“Policy on the administration of remittance flows is aimed at increasing the transparency of remittance inflows, reducing rent-seeking activities, and providing Nigerians in the diaspora with cheaper and more convenient ways of sending remittances to Nigeria.

“PwC forecasts suggest that Nigeria’s remittance flows could reach US$34.89 billion by 2023. But this can only be accomplished if remittance infrastructure improves and if the right policies are put in place.

“The use of reimbursements of remittance fees has been critical in supporting improved inflow of remittances to countries in South Asia and in improving their balance of payments position following the COVID-19 pandemic”.

Here is a list of the recognized IMTOs by the Central Bank of Nigeria; Money Gram, WorldRemit, Remitty, Smallword, Thunes, Homesend, Transfast, and Western Union.

Some facts to note about the scheme

· No matter the currency that is sent to you from the diaspora, you will be paid in US dollars. As a matter of fact, this practice has been on since December 2020.

· This scheme can only be recognized if the remittance is done by one of the recognized IMTOs

· Whether you choose to cash the dollar or send it to your domiciliary account, you will receive your 5Naira incentive still.

· The scheme is slated to start on the 8th of March through the 8th of May.