The Association of Bureau De Change Operators of Nigeria (ABCON) on Monday said that a competitive Diaspora Remittance market space would engender Naira stability.
Aminu Gwadabe, President, ABCON, made the assertion in an interview with newsmen in Lagos, against the backdrop of the recent CBN Naira for dollar policy issued on March 5.
Gwadabe lauded the apex bank’s policy, but said more needed to be done for the policy to achieve its intended objective of shoring up the value of the Naira through liquidity boost.
He said there was the need to break the monopoly of some certain players in the remittances space by allowing the participation of other stakeholders like BDCs in the realm of remittances.
According to him, Kenya, Ghana, South Africa, etc, have all deepened their remittance space through a competitive market space.
The ABCON boss said that measures taken by the aforementioned countries had enabled them to achieve volumes, leading to the stability of their local currencies.
He said the Naira for dollar measure was among the many recent strategies deployed by the CBN to attract more Diaspora remittances into the official channel and address the foreign exchange liquidity concerns in the market.
“Their is no doubt the incentive will be somehow attractive to the targeted beneficiaries of the remittances and therefore aimed to address concerns of one of the principal ally in the chain of remittances,” Gwadabe said.
He said that statistics from the Nigerians in Diaspora Commission (NiDCOM) suggested that over 17 million Nigerians legally residing in the Diaspora remitted over $20 billion in 2020 in spite of the COVID-19 pandemic.
“This therefore suggests that it is a window, if well articulated and includes all the principal allies in the remittances space, will help the Nigerian economy for the availability of FX liquidity,” Mr Gwadabe said.
The CBN, in a circular dated March 5, 2021, directed all Deposit Money Banks and International Money Transfer Operators to henceforth pay recipients of diaspora remittances N5 for every USD received as remittance inflow.
The incentive, tagged “Naira 4 Dollar Scheme”, was announced in a circular signed by Saleh Jibrin, CBN‘s Director, Trade and Exchange Department.
Jibrin said that the scheme, which would run from March 8 until May 8, would allow all recipients of diaspora remittances to be paid N5 for every one dollar received.
He said that beneficiaries would get the incentive, whether they collect the remitted dollars as cash across the counter or through their domiciliary accounts.
The director said all commercial banks and International Money Transfer Operators (IMTOs) should ensure that the scheme takes effect from March 8.
Shedding more light, CBN governor, Godwin Emefiele, said the “Naira 4 Dollar Scheme’’ for diaspora remittances would enhance a transparent and more flexible remittance administration.
Emefiele said this in a series of tweets in CBN’s verified twitter handle.
He stated that the scheme would greatly enhance the benefits of diaspora remittances in supporting investments and economic growth in Nigeria.
He said that the scheme was consistent with the global trend, adding that the apex bank aspired to ensure that remittance flows and diaspora investments became a significant source of external financing.
`CBN strives to constantly improve our remittance infrastructure, ease the process of international money transfer and simplify the experience for senders and recipients.
“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 new policy will create an easier, more flexible, and more transparent, system of remittance administration, it will greatly enhance the benefits of diaspora remittances in supporting investments and growth in Nigeria,’’ he stated.
He said that the policy was aimed at reducing rent-seeking activities, and providing Nigerians in the diaspora with cheaper and more convenient ways of sending remittances to Nigeria.
Similar schemes, according to him, have helped boost economies of some countries across the world.
“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.
“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,’’ he said.