A total of $24 billion is expected annually as remittances from citizens in the diaspora, following the introduction of Diaspora Foreign Exchange Remittances Policy by the Central Bank of Nigeria (CBN).
According to the Governor of Nigeria’s Central Bank, Godwin Emefiele, the target is predicated on the inflows accruable to countries that have similar demographic features with Nigeria, such as Pakistan, which often receives about $2bn monthly from their citizens in diaspora.
In his words, “I’m aware from the data available that, for instance, Pakistan, even in the midst of COVID-19 receives $2 billion monthly from inflows from Pakistanis in the diaspora.”
“If Nigeria is able to receive just $1 billion every month or move close to receiving $2 billion a month, I’m certain you all know what will happen to the exchange rate in Nigeria.”
The CBN Boss is optimistic that the monthly target of $2 billion would reduce the pressure on the CBN to fund the commercial operations of Deposit Money Banks.
What you should know
- Diaspora Foreign Exchange Remittances Policy takes effect from Friday, December 4, 2020.
- To block any possible loophole or sabotage, the CBN had ordered all DMBs to close all their Naira General Ledger, through which the naira remittances were being carried out.
- The target of annual remittance inflow of close to $24bn will help improve the country’s balance of payment position, reduce her dependence on external borrowing, and mitigate the impact of COVID-19 on foreign exchange inflows into the country.
- The policy change 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.
- All beneficiaries shall have unfettered access and utilization to such foreign currency proceeds, either in FX cash and/or in their Domiciliary Accounts, in line with the extant CBN circular TED/FEM/FPC/ GEN/01/010.
