CBN Approves Use of Naira for Diaspora Remittance

The Central Bank of Nigeria (CBN) has now approved the use of Naira as payouts for diaspora remittance, almost three years that the administrations of former President Muhammadu Buhari and ex-Governor Godwin Emefiele placed a ban on it.

The apex bank, in a circular Payout Option of Naira for Receipt of Proceeds of Diaspora Remittances dated July 10, 2023, approved the payment of the local currency to beneficiaries of diaspora remittance.

The circular means that banks and International Money Transfer Operators (IMTOs) can now pay their recipients in Naira, providing them with an alternative of either picking the available Naira or scarce Dollars.

Part of the CBN’s circular signed by Dr O.S. Nnaji, Director, Trade and Exchange Department, said, “The Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.”

Customers who choose to receive their funds in Naira will be paid using the Investors & Exporters Window rate on the day of the transaction.

In November 2020, the CBN banned banks and IMTOs from paying recipients in Naira. The policy also stated that only banks could transfer funds onward to recipients.

As a result of this, the CBN policy stifled many digital remittance companies that allowed Nigerians abroad to send money directly to the Naira accounts of recipients.

The CBN also released a list of 62 IMTOs that were approved to receive the option of receiving Naira payment in addition to Dollars and eNaira as payout options.

This is an update from less than 50 companies approved before, with some newly approved IMTOs, including CSL Pay Limited, Direkt Wire UK Limited, Fiem Group LLC DBA Ping Express, Lycamoney financial services limited, and SimbaPay Limited, among others joining the ranks.

This has been regarded as another step by the new administration of President Bola Tinubu to loosen the grip the apex bank has exercised over FX rates in recent years.

This is as after it unified the exchange rate regimes and put in other measures like the removal of fuel subsidies, which gulped N4.3 trillion last year alone and over N10 trillion in the last five years.

This move will also be great for customers who can now choose between receiving their funds in foreign currency, eNaira and the Naira, making Dollars available for those who need them.