HomeBUSINESSCBN Boosts Foreign Currency Remittance, Approves 14 New IMTOs to Double Flow

CBN Boosts Foreign Currency Remittance, Approves 14 New IMTOs to Double Flow

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Afor Kenneth

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The Central Bank of Nigeria (CBN) has initiated efforts to double foreign-currency remittance flows through formal channels by granting Approval-in-Principle (AIP) to 14 new International Money Transfer Operators (IMTOs).

This announcement was made in Abuja on Wednesday by the Bank’s Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali.

Ali explained that this initiative aims to enhance the consistent supply of foreign exchange in the official market by fostering increased competition and innovation among IMTOs. The goal is to reduce the cost of remittance transactions and enhance financial inclusion.

According to her, “This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira.”

Overtnews recalls that the CBN Governor, Mr. Olayemi Cardoso, had recently declared: “We’ve set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach.

“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry.”

Furthermore, Sidi Ali reiterated that the CBN sees the expansion of formal remittance flows as essential for stabilizing Nigeria’s exchange rate, given its significant contribution of over 6% to the country’s GDP. By bolstering these flows, the aim is to counteract the historical volatility in the exchange rate, which often stems from external factors like fluctuations in foreign investment and oil export proceeds.

The increase in the number of IMTOs stands as a key action spearheaded by the CBN’s remittance task force, overseen by Governor Cardoso. This collaborative effort brings together specialists to closely collaborate with the private sector and market operators, streamlining operations within Nigeria’s remittance ecosystem.

Established following an executive learning session with IMTOs during the World Bank/IMF Spring Meetings in April 2024, the task force aims to enhance the ease of doing business in the remittance sector. It will convene regularly to implement strategic measures and monitor their impact on remittance inflows, ensuring alignment with the overarching goal of fostering stability and growth in Nigeria’s economy.

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