Central Bank of Nigeria CBN says its new ‘Naira for Dollar Scheme” which takes effect on monday, will provide Nigerians in the Diaspora with cheaper and more convenient ways of sending remittances to Nigeria.
The policy, which gives N5 rebate for every $1 sent by Nigerians in the diaspora to the country, will be paid directly to the account of beneficiaries, following receipt of the remittance inflows.
The CBN governor, Godwin Emefiele, broke the news at the weekend during one of the commercial Bank’s Inaugural Diaspora Webinar on the Implications and Impact of the New FX Policy on Diaspora Investments.
He explained that the move was also to increase the transparency of remittance inflows and reducing rent-seeking activities.
Mr Godwin Emefiele expressed optimism that the new policy measure would encourage banks and financial institutions to develop products and investments vehicles, geared towards attracting investments from Nigerians in the diaspora.
He emphasized that the new measure would help to make the process of sending remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora.
Citing cases in other climes, Emefiele said the use of reimbursements of remittance fees had 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.
While noting that the average cost of sending $200 worth remittances to Nigeria from the United States was about 4.7 per cent, while studies had shown that even a one percent decrease in cost of sending remittance could result in a significant boost in inflows.
“Countries in South Asia such as Pakistan and Bangladesh are aware of this impact and they introduced reimbursement schemes to support inflows. In Pakistan the scheme which is known as free send has enabled record amount of inflows of over $2 billion a month even during the COVID pandemic”
“Bangladesh introduced its own scheme in June 2019, which is a 2 percent rebate on remittance inflows. Following this action, they have also seen a 20 percent boost in remittance inflows,” The CBN governor explained.