By Francis Ogwo
The Central Bank of Nigeria (CBN) has announced the amendment of procedures for receipt of diaspora remittances in a move aimed at improving the liquidity in the forex market and reduce the disparity between the black market and official I&E window.
This was contained in a circular issued by the CBN on Monday, November 30, 2020, to all authorized dealers and signed by its Director for Trade and Exchange Department, Dr O.S. Nnaji.
Details of the procedure makes it possible for beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) to henceforth receive such inflows in foreign currency (US Dollars) through the designated bank of their choice.
The statement reads: ‘’In an effort to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria, the Central Bank of Nigeria (CBN) wishes to announce as follows;
“Beneficiaries of diaspora remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US Dollars) or into their ordinary domiciliary account. Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.’’
The CBN also stated that such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.
The apex bank also stated that these changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of diaspora remittances into Nigeria.
It also points out that these changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that recipients of remittances would receive a market-reflective exchange rate for their inflows.
It urges all authorized dealers and the general public to note that beneficiaries shall have unfettered access and utilization to such foreign currency proceeds, either in cash and/or in their domiciliary accounts in line with the circular.
The implication of this is that when Nigerians living in diaspora transfer money to people in the country, they can in turn withdraw the money in dollar cash and sell wherever they want to.
Currently, the exchange rate in the black market is around N500/$1 as compared to N395 at the official BDC market.