The Central Bank of Nigeria (CBN), has reported a significant increase in remittance inflow following its decision to issue additional licences to International Money Transfer Operators (IMTOs).
CBN governor Yemi Cardoso during a press briefing after the 29th Monetary Policy Committee (MPC) meeting held in Abuja, disclosed that this policy resulted in a record $585 million in remittance inflows in August 2024.
In a deliberate strategy to boost remittance inflow to Nigeria, Cardoso attributed the surge to the CBN’s concerted efforts, including the expansion of IMTO licenses to encourage more operators to enter the market. According to him, these steps have made it easier for individuals to send money to Nigeria, contributing to the record figures. He noted that regular engagement with IMTOs has been critical to ensuring steady inflows.
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“This increase didn’t happen by chance; it was the result of a deliberate, calculated effort by the central bank. We recognized certain inefficiencies in the system and took proactive steps to address them, and I’m happy to report that our strategy has been effective”, Cardoso said.
The CBN governor had earlier stated that the Apex bank is working to permanently eliminate any bottlenecks that prevent flows through formal channels to increase the supply of foreign exchange with the official market.
Recall that in May 2024, the Central Bank of Nigeria (CBN) granted 14 new International Money Transfer Operators (IMTOs) Approval-in-Principle (AIP) in a new effort to double foreign-currency remittance inflows through formal channels. This development came after the country saw a 6.28% decrease in direct foreign exchange (FX) remittances in the first quarter of 2024, totaling $282.61 million versus $301.57 million in Q1 2023.
Hakama Sidi Ali, CBN’s acting director of corporate communications, said the approval 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.
“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,” she said.
Ali also said 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.
The August remittance inflow represents a continuation of this upward trend, with the July figure of $553 million already marking an all-time high. These increases underscore the effectiveness of the CBN’s recent policy measures aimed at stabilizing Nigeria’s foreign exchange market and mitigating the impact of external factors such as fluctuations in foreign investments and oil export revenues.