New ‘CBN Naira 4 Dollar’ Scheme Will Reduce Forex Market Manipulation-Emefiele

The Central Bank of Nigeria has said that the introduction of its new “CBN Naira 4 Dollar Scheme” which comes into effect on Monday, March 8, 2021, is aimed at providing Nigerians in the Diaspora with cheaper and more convenient ways of sending remittances to Nigeria.

The CBN Governor, Mr. Godwin Emefiele stated this while delivering the keynote address to the Fidelity Bank’ inaugural Diaspora Webinar on the implications and impact of the new forex policy on Diaspora investments.

The CBN Governor explained that the move was also to increase the transparency of remittance inflows and reducing rent-seeking activities, even as he expressed optimism that the new policy measure will encourage banks and financial institutions to develop products and investments vehicles, geared towards attracting investments from Nigerians in the diaspora.

He said the new policy is expected to enlarge the scope and scale offoreign exchange inflows into the country with a view to stabilizing the exchange rate and supporting accretion to external reserves.

More importantly, he said it would provide an opportunity for Nigerians living abroad to make investments in their home country.

Reiterating the provision of the new circular, the CBN Governor said the Bank introduced the rebate of N5 for every $1 of fund remitted to Nigeria,through International Money Transfer Operators licensed by the Central Bank in order to incentivize the process of remittance.

He explained that the rebate will be provided to the bank accounts of beneficiaries, following receipt of remittance inflows.

The Central Bank of Nigeria had on Friday introduced the N5 incentive for every dollar remitted into the country by Nigerians in the Diaspora.

The circular dated March 5,2015 with reference number TED/FEM/PUB/EPC/01/003 was signed by the Director, Trade and Exchange Department of the CBN, Dr O.S Nnaji.

The CBN the initiative tagged “CBN Naira 4 Dollar Scheme” is part of efforts to sustain the encouraging increase in inflows of diaspora remittances into the country.

The apex bank in the circular said under the scheme, all recipients of diaspora remittances through the CBN licensed IMTOs shall henceforth be paid N5 for every $1 received as remittance inflow.

The implications of this, it stated, is that a typical recipient of Diaspora remittances will, at the point of collection, receive not only the dollar sent from abroad but also the additional N5 per dollar received.

This incentive, according to the CBN is to be paid to recipients whether they choose to collect the dollars as cash across the counter in a bank or transfer same into their domiciliary account.

The World Bank had put the inflow of Diaspora remittance to Nigeria as of the end of 2019 at $23.8bn.