The approval aims to strengthen the flow of foreign currency into the country through official channels.
The Central Bank of Nigeria (CBN) on Wednesday said that it has granted Approval-in-Principle (AIP) to 14 new International Money Transfer Operators (IMTOs) to enhance remittances.
Remittances, which involve transferring funds from overseas to families or individuals within the country, form a substantial part of Nigeria's foreign exchange inflows. They are crucial for maintaining economic stability and fostering growth.
According to a statement by the CBN's Acting Director of Corporate Communications, Hakama Ali, the approval aims to strengthen the flow of foreign currency into the country through official channels.
She emphasised that the addition of these IMTOs will contribute to increasing the availability of foreign exchange in Nigeria's 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," she said.
According to her, the CBN viewed increasing formal remittance flows--one of the major sources of foreign exchange, accounting for over 6 percent of GDP--as a means of reducing the historical volatility in Nigeria's exchange rate caused by external factors such as fluctuations in foreign investment and oil export proceeds.
She said the increase in the number of IMTOs is one of the primary actions initiated by the CBN's remittance task force, overseen by Mr Cardoso as a collaborative unit pulling together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria.
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Mrs Ali said the formation of the task force stemmed directly from an educational session with IMTOs during the World Bank/IMF Spring Meetings in Washington DC, USA, in April.
This group will convene regularly to execute plans and assess the effects of its actions on remittance inflows.
She also recalled the CBN Governor, Olayemi Cardoso earlier expressing confidence in the CBN's ability to double remittance flows into Nigeria within a year.
"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. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry," Mr Cardoso was quoted as saying.
As of the end of the first quarter of 2024, the CBN recorded a total direct foreign exchange (FX) remittances of $282.61 million representing a $18.96 million decrease when compared to the $301.57 million diaspora remittances recorded in Q1 2023.
