The Central Bank of Nigeria (CBN) has said that its recent decision to licence more International Money Transfer Operators (IMTOs) has positively impacted remittance inflow into the country leading to a record of $585 million remittance in August 2024.
The CBN Governor, Yemi Cardoso, said this during a press briefing at the end of Tuesday’s 297th Monetary Policy Committee (MPC) meeting in Abuja.
IMTOs are organizations licensed to facilitate cross-border fund transfer services for individuals and entities residing abroad to recipients in Nigeria.
Responding to a question on the $553 million remittance recorded in July, which came as an all-time-high monthly inflow, the CBN Governor:
“As of August, that figure, from what I’m told is $585 million. Now that is a big deal because it is over 130% of what was recorded for the corresponding period of last year.”
Deliberate efforts of CBN
Cardoso pointed out that the improvement in remittance inflow was the result of the Apex Bank’s efforts, which included the issuance of new IMTO licences to make it easy for people to send money to the country.
- He said the CBN liberalized the IMTO licensing and encouraged more operators in that sector to open accounts.
- According to him, the bank is now interacting with the IMTOs on a regular basis to ensure that the number begins to work.
“I want to just say to you that this (the increase in remittance) didn’t drop from the ceiling; It was a deliberate, calculated effort.
“We recognized in the central bank that certain things were not happening and that there was a need for the central bank itself to see what it could do with respect to encouraging inflows into the system. And I’m happy to say that it has paid off,” he said.
More products expected from IMTOs
The CBN Governor said the bank would rest on its laurels, adding that it would continue to encourage the IMTOs to come up with some very innovative products.
Cardoso expressed confidence that if the current trajectory is sustained, the value of remittance inflows to Nigeria will continue to go up.
“I had made a commitment, and I think this was probably in March this year, and I said at the time when I decided to engage this, that within a year I would double that (remittance).
“We set up a committee. I head it, and I drive it personally. I am personally invested in that, and I am personally driving it, and I know that we will get the results that we need,” he said.
Backstory
As part of efforts to increase the country’s remittance inflows, the CBN in May this year, granted approval in principle (AIP) to 14 new IMTOs.
- CBN’s Acting Director of Corporate Communications, Hakama Sidi Ali, who announced the new licences said the approval would 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.
- She also said that the move by the apex bank is 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.
- Meanwhile, in August, the CBN announced a historic surge in remittance inflows, reaching an all-time high of $553 million in July 2024.
- The figure marked a 130% increase compared to the same period in 2023 and underscored the effectiveness of recent policy measures aimed at enhancing liquidity in Nigeria’s foreign exchange market.