The Central Bank of Nigeria (CBN) has issued a circular directing International Money Transfer Operators (IMTOs) to offer remittances pay-out in Naira to beneficiaries, alongside foreign exchange. The CBN has also instructed that the rate for the Naira pay-out should be determined based on the Investors' and Exporters' Window foreign exchange rate.
The circular, dated July 10, 2023, is an update to a previous circular issued on November 30, 2022, which provided guidelines on the payout policy for diaspora remittances to beneficiaries in Nigeria. The November circular introduced the payment of dollars to beneficiaries through IMTOs via their chosen banks, ensuring unrestricted access to the funds.
According to the new circular, the Naira payment option is an additional choice for receiving diaspora remittances, in addition to United States Dollars and the E-Naira.
The full text of the circular states, "Further to the circular referenced FED/FEM/FPC/01/011 dated November 30, 2022, in respect of the above subject, the Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.
Accordingly, all recipients of Diaspora remittances through the CBN-approved International Money Transfer Operators (IMTOs) on the attached list shall henceforth have the option of receiving Naira payment in addition to USD and e-Naira as payout options.
For the avoidance of doubt, IMTOs are required to pay out the proceeds using the Investors' & Exporters' window rate as the anchor rate on the date of the transaction. The regulation takes effect immediately."
It is worth noting that the CBN recently unified all segments of the Nigerian forex market, collapsing multiple windows into the Investors and Exporters (I&E) window. This move aims to enhance liquidity and stability in the market and attract foreign investors to the Nigerian economy.
Additionally, the CBN discontinued the RT200 program and the Naira4dollar remittance scheme last month. The Naira4Dollar scheme provided incentives for remittances from Nigerians in the diaspora, while the RT200 program aimed to increase non-oil export earnings to $200 billion in foreign exchange repatriation over the next five years.
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