The CBN says the scheme takes effect March 8th
The Central Bank of Nigeria has explained that its new "Naira 4 Dollar Scheme" seeks to make remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora.
PREMIUM TIMES reported that the new scheme will allow recipients of diaspora remittances through CBN's money transfer operators to earn a rebate of N5 for every $1 received as remittance inflow.
Since its announcement, Nigerians have come up with different interpretations of the rationale behind the new policy. While some said it would devalue the naira, others opined that it would destabilize the parallel market.
But in a series of tweets Saturday, the CBN explained the rationale behind the new policy.
"CBN strives to constantly improve our remittance infrastructure, ease the process of international money transfer and simplify the experience for senders and recipients," the apex bank said.
"In an effort to reduce the cost burden of remitting funds to Nigeria by working Nigerians in the Diaspora, the #CBN has introduced a rebate of N5 for every $1 of fund remitted to Nigeria, through IMTOs licensed by the CBN. The Scheme will take effect on the 8th of March 2021.
"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."
The bank said the new FX policy will create an easier, more flexible, and more transparent system of remittance administration. It will also greatly enhance the benefits of diaspora remittances in supporting investments and growth in Nigeria, it added.
"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," the bank said.
It noted that 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.