By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has granted 14 new International Money Transfer Operators (IMTOs) Approval-in-Principle (AIP) as part of efforts to double foreign exchange remittance flows through official channels.
This was disclosed in Abuja on Wednesday by the apex bank’s Acting Director of Corporate Communications, Mrs Hakama Sidi Ali.
Mrs Ali stated that the initiative will help increase the sustained supply of foreign exchange in the official market by promoting greater competition and innovation among IMTOs to lower the cost of remittance transactions and boost 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.”
This is in line with the promise of the CBN Governor, Mr Yemi Cardoso, to double the country’s inflows which was around $20 billion last year.
“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,” he said at a recent interview.
Mrs Ali also noted the CBN viewed increasing formal remittance flows— one of the major sources of foreign exchange, accounting for over 6 per cent of GDP—as a means of reducing the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.
To approach this issue, the CBN under Cardoso is seeking to increase the number of IMTOs.
This is one of the primary actions initiated by the CBN’s remittance task force, overseen by Mr Cardoso as a collaborative unit pulling together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria.
The task force was established as a direct result of an executive learning session with IMTOs during the World Bank/IMF Spring Meetings held in Washington DC, United States of America, in April 2024.
The task force will meet regularly to implement strategy and monitor the impact of its measures on remittance inflows.