By Oludare Mayowa
Nigeria received a total of $21 billion in Diaspora remittances in 2019, making the country the seventh-largest recipient of remittances globally, according to the World Bank.
Speaking at the Fidelity Bank Plc virtual forum of foreign exchange policy on Saturday, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, said the World Bank report showed that remittance flows to low and middle-income countries reached a record high of $548 billion in 2019.
“Though official remittance flows declined in 2020 due largely to the undermining impact of the Covid-19 pandemic, it maintained its dominance over FDI inflows,” the CBN stated.
Emefiele, quoting the global financial watchdog report noted that remittance surpassed Foreign Direct Investment (FDI) flows of $534 billion and overseas development assistance of about $166 billion in 2019.
“Consistent with the global trend, Nigeria aspires to ensure that remittance flows and diaspora investments become a significant source of external financing.
“Over the years, foreign direct investments and, more noticeably, portfolio flows to Nigeria have exhibited volatilities, the reversals of which exert enormous pressures on domestic market conditions. Hence the need to boost remittance flow.
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While explaining the reason for its introduction of ‘CBN naira 4 dollar scheme,’ the Governor said it was designed to reduce the cost burden of remitting funds to Nigeria by diasporans.
The regulatory bank had launched an incentive where recipients of diaspora remittance are given N5 for every $1 of fund remitted to the country IMTOs licensed by the CBN.
“This rebate will be provided to the bank accounts of beneficiaries, following receipt of remittance inflows.
“We believe this new measure will help to make the process of sending remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora,” Emefiele said, adding that the new policy is expected to take effect on March 8, 2021.
Emefiele noted that the the CBN 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, we believe 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.
“We have no doubt that these changes can help to finance a future stream of investment opportunities for Nigerians living abroad.
The governor said reducing the cost of sending remittances is a significant way to boost remittance inflows to Nigeria.
According to him, the new policy is expected to enlarge the scope and scale of foreign exchange inflows into the country with a view to stabilizing the exchange rate and supporting accretion to external reserves
