The Central Bank of Nigeria (CBN) has announced plans to significantly increase foreign-currency remittance flows through formal channels by granting Approval-in-Principle (AIP) to 14 new International Money Transfer Operators (IMTOs).
This initiative aims to boost competition and innovation in the remittance market, ultimately lowering transaction costs and enhancing financial inclusion.
The CBN’s Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, disclosed the plans in Abuja, emphasizing that the move is designed to sustain the supply of foreign exchange in the official market. “This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira,” Ali stated.
CBN Governor, Mr. Olayemi Cardoso, recently underscored the importance of this initiative, declaring: “We’ve set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach.
We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently.”
Governor Cardoso outlined a structured approach to overcoming challenges in the remittance sector, highlighting the CBN’s commitment to working closely with key stakeholders.
The increase in IMTOs is a crucial step in this direction, as formal remittance flows are a major source of foreign exchange, contributing over 6% of Nigeria’s GDP.
Mrs. Ali reiterated that enhancing formal remittance channels will help mitigate the volatility in Nigeria’s exchange rate, often influenced by external factors such as foreign investment fluctuations and oil export proceeds.
By promoting a more stable remittance inflow, the CBN aims to reduce these volatilities and support a more resilient economy.
The task force, established under Governor Cardoso’s leadership, emerged from an executive learning session with IMTOs during the World Bank/IMF Spring Meetings in Washington DC, USA, in April 2024.
This collaborative unit brings together specialists from both the private sector and market operators to streamline the remittance process and facilitate business operations within Nigeria’s remittance ecosystem.
The task force will meet regularly to strategize and monitor the impact of these measures on remittance inflows, ensuring that the set goals are achieved and the remittance sector is strengthened for sustainable economic growth.
