For decades, remittances from Nigerians living abroad have significantly added to domestic income, social welfare and economic development. The Central Bank of Nigeria (CBN) and banks work closely to broaden the scope and scale of diaspora inflows through formal remittance channels dominated by International Money Transfer Operators (IMTOs).
Commercial banks have through their networks and partnerships with IMTOs supporting Nigeria’s foreign capital inflows and CBN’s policies on exchange rate stability, reserve accretion, job creation, poverty reduction and economic growth.
Diaspora remittances remain major sources of stable external financing for Nigeria and developing countries. Countries have continued to harness these benefits despite the global fall in remittance flows in the last one year due to Covid-19 pandemic.
To keep the dollar flows coming, the Central Bank of Nigeria (CBN) and commercial banks work closely to constantly improve Nigeria’s remittance infrastructure, ease the process of international money transfer and simplify the experience for senders and recipients.
For these stakeholders, the efficiency of remittance services, especially as provided through commercial banks’ and International Money Transfer Operators (IMTOs’) partnerships are critical to boosting dollar liquidity in the economy.
The PwC forecasts suggest that Nigeria’s remittance flows could reach US$34.89 billion by 2023, hence the need for the apex bank and commercial banks to continually work closely to ensure that more funds flow into the economy.
In this regard, the CBN had urged banks to develop products and investments vehicles, geared towards attracting funds from Nigerians in the diaspora.
Such channels for sending and receiving funds from the diaspora are expected to be seamless and convenient to their customers.
In compliance to this directive, many commercial banks, including FirstBank, United Bank for Africa (UBA), Access Bank, Fidelity Bank, Zenith Bank, Guaranty Trust Bank, Ecobank, among others are using their wide network to boost foreign capital flows to the economy.
According to CBN Governor, Godwin Emefiele, the new measure would help to make the process of sending remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora.
In a circular to all authorized dealers and deposit money banks the apex bank said the policy, which was to end on Saturday May 8, will continue till further notice.
Forex Trading Associate, AZA, a global forex dealer, Oghenefejiro Eduviere, said the ’Naira for Dollar’ policy will continually support exchange rate stability and boost dollar flows to the economy.
Steps taken by banks to boost forex inflows
The international money transfer is a fast and secure electronic payment service that allows money transfer across African countries and beyond.
Although the operational guideline for each IMTOs differs, the objective remains to provide seamless and affordable money transfer service to beneficiaries.
Already, many commercial banks have energized their branches and networks locally and internationally to attract dollar inflows under the ‘Naira for Dollar” policy of the apex bank and well as partnering with IMTOs.
Many of the banks have partnered with MoneyGram, Western Union, Ria Money transfer, World Remit, Flutter Wave, AFTAB (Ace Money Transfer), Cash Pot, Colony Capital (Fincode), Swift Payment, Naira Gram, SmallWorld, Sendwave and Omnex to enable them serve more people in the remittance market.
For instance, UBA partnership with with top IMTOs is ensuring convenience in sending and receiving money from anywhere in the world. Through the bank’s remittance partners, customers can receive money directly into their UBA account or pick up cash at any of its branches nationwide.
UBA has also created money transfer services that allow customers deposit, transfer and withdraw cash in local currencies across 20 African countries.
The UBA, led by its Group Managing Director/CEO Kennedy Uzoka, is also implementing the ongoing ‘Naira for Dollar’ policy of the CBN which gives N5 rebate for every $1 sent by Nigerians in diaspora.
The bank says it remains committed to providing ease and convenience for money transfers across the world.
FirstBank has enabled its over 750 branches across the country to enable people go to receive money sent by loved ones abroad. With the network of its branches across the nooks and crannies of the country, receiving money from abroad is refreshingly exciting at every visit to the branch due to its timely services.
Deputy Managing Director of FirstBank, Gbenga Shobo said FirstBank has partnered with many of the IMTOs and other money transfer firms to ensure its customers receive funds form abroad seamless.
“We consider these IMTOs “essential to ensure FirstBank customers are at an advantage to receive money from their loved ones and business associates, anywhere they are, across the world.”
Ecobank is implementing the Central Bank of Nigeria (CBN)’s scheme which offers N5 for every Dollar received into domiciliary accounts or as cash over the counter. Korede Demola-Adeniyi; Head, Consumer Banking, Ecobank Nigeria, who announced this in Lagos stated that the decision is in line with the CBN’s directive and fully aligns with efforts to encourage the inflow of diaspora remittances into the country. She noted that the “CBN Naira 4 Dollar scheme” is an unprecedented incentive for senders and recipients of international money transfers.
Korede Demola-Adeniyi said that the scheme takes effect from 8th March and will run till 8th May, 2021. “Ecobank will pay N5 on every Dollar so beneficiaries will not only get the foreign currency sent from their family and friends abroad, they will also get extra Naira”, she stated.
Country Manager, Nigeria and Ghana, at WorldRemit, Gbenga Okejimi, said the company was excited by the fact that it can continue to enable the transfer of remittances to more people across Nigeria whilst also supporting the Nigerian government in its efforts to strengthen the economy.
WorldRemit Founder, Ismail Ahmed, came up with the idea to create WorldRemit, it was with the ultimate goal of ensuring that the diaspora community could send money back home easily and through a safe platform. The company said it is constantly evolving, innovating and adapting to ensure that our customers’ needs are met efficiently. It added that customers of UBA can access US Dollar payout through the bank transfer and cash pickup options.
The World Remit does not require minimum amount for transfer. However, the initial transaction is subject to a maximum of $2,000, while the maximum limit per transaction is $7,500, the total of which must not exceed$50,000 every six months. There are no charges to the beneficiaries.
For instance, with Africash account and non account holders of UBA can send and receive money in local currency from all its branches across Africa.
“The customer just need to fill Africash form, provide Bank verification Number (BVN), open savings/current account with the bank. For non-account holders, a valid means of Identification is required while the receiver should have the Personal Identification Number (PIN) code provided by the sender to collect funds,” the bank said in emailed report.
Understanding CBN’s remittance rules
Emefiele earlier directed that beneficiaries of remittance flows through an IMTO to receive such inflows in foreign currency (US dollars) through any bank of their choice.
Recipients also have the sole decision to receive the foreign currency (US dollar) either in physical cash or instruct the bank to credit the fund to an ordinary domiciliary account, depending on their preference.
Besides, the CBN’s 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.
In addition, the apex bank believes that this new policy measure will encourage banks and financial institutions to develop products and investments vehicles, geared towards attracting investments from Nigerians in the diaspora. These policy shift is expected to help to finance a future stream of investment opportunities for Nigerians living abroad.
