The Central Bank of Nigeria (CBN) is targeting about $2 billion monthly from diaspora remittances coming after the introduction of the new diaspora forex remittances policy.
CBN Governor, Godwin Emefiele, disclosed this at a press briefing on the new policy in Abuja on Thursday.
The CBN said it took the decision following resistance from International Money Transfer Operators over its new decision on diaspora remittances.
Emefiele explained that if Nigeria is able to receive $1billion monthly or $2 billion target it will boost the country’s exchange rate.
The CBN, he said, has ordered all Deposit Money Banks (DMBs) in the country to close all their Naira General Ledger through which the naira remittances were so far being carried out while he informed “Nigerians both at home and in the Diaspora, that the policy of recipients receiving their monies from abroad will kicks off today, December 4, 2020”.
According to Emefiele, “The CBN observed some push back by some of the IMTOs who were bent on continuing their nefarious activities of undermining our policy by attempting to resist the new policies”.
As a result of the push back, the CBN on Wednesday, December 2, 2020, ordered that “all DMBs must close all Naira General Ledgers through which the Naira remittances were hitherto being carried out”.
To enable smooth implementation of the new policy on diaspora remittances, the CBN engaged commercial banks and major IMTOs “to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice”.
Following the meeting between the CBN, DMBs and IMTOs “the stakeholders have agreed that they would deploy all the necessary tools to ensure that these measures become effective from Friday, December 4, 2020”.
All the IT systems of these IMTOs (Western Union, Moneygram and Ria services) and the DMBs he said “have been properly configured to begin remittance tomorrow, Friday, December 4, 2020”.
These new policy measures, he added, “would help in providing a more convenient channel for Nigerians in the Diaspora to remit funds back to Nigeria, as well as ensure that these funds can contribute to the overall development of our economy”.
Before taking the diaspora remittances decision, the CBN said it analyzed data on IMTO inflows into the country over the past year, “and through our investigations discovered that some IMTOs, rather than compete on improving transaction volumes and create more efficient ways for Nigerians in the Diaspora to remit funds, resorted to engaging in arbitrage arrangements on the naira-dollar exchange rate, which to a large extent resulted in a significant drop in flows into the country”.
The activities of the IMTOs he added “also encouraged the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria, thereby undermining our Foreign Exchange management framework”.
As a result of these infractions, the Central Bank of Nigeria, on November 30, 2020, announced a new policy initiative “to boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient flow of remittances back to Nigeria”.
Asked if the policy will guard against money laundering, the CBN governor said “I want you to know that even from abroad where these funds are coming Western Union, Ria and Moneygram are properly licensed and regulated and I know for certain that institutions or countries where they are domiciled abroad would not allow money laundering practices or remittance of funds in those countries into our country to be associated with money laundry”.
Here in Nigeria, the CBN governor said “those who will be receiving those funds will come with some form of identity card and today we even have BVN”.
“I am not saying that BVN is compulsory for you to collect dollars over the counter but I am saying there would be some form of identification that makes it easy for those who are receiving funds to receive their monies”.
He added that “banks have their Know Your Customer (KYC) and over time we will try and encourage situations where funds are flowing into the domiciliary account of the recipients, I belief money laundry issues would have been totally dealt with”.
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