Emefiele: N5 for $1 Policy Will Make Remittances Cheaper For Nigerians Abroad

Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), says the new diaspora policy — “Naira 4 Dollar Scheme” — will make remittance transfer cheaper for Nigerians in the diaspora.

Emefiele said this during Fidelity Bank’s inaugural diaspora webinar on Saturday.

The apex bank had announced that all recipients of diaspora remittances through CBN-licensed international money transfer operators (IMTOs) will get paid N5 for every $1 received as remittance inflow.

The scheme, announced on Saturday, will take effect on March 8 and end two months later.

“As we are all aware, remittances from Nigerians living abroad has had significant benefit on domestic income, social welfare and economic growth in Nigeria,” Emefiele said during the webinar.

“Nigeria aspires to ensure that remittance flows and diaspora investments become a significant source of external financing.

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“In an effort to reduce the cost burden of remitting funds to Nigeria by working Nigerians in the diaspora, the Central Bank of Nigeria has introduced a rebate of N5 for every $1 of fund remitted to Nigeria, through IMTOs licensed by the Central Bank.

“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 the policy is expected to encourage banks and financial institutions to develop products and investment vehicles geared at attracting investments from Nigerians in the diaspora.

He said countries such as Bangladesh and Pakistan have adopted the use of reimbursement schemes to support remittance inflows.

“In general, the new policy is expected to enlarge the scope and scale of foreign exchange inflows into the country with a view to stabilising the exchange rate and supporting accretion to external reserves,” the CBN governor said.

“More importantly, it will provide an opportunity for Nigerians living abroad to make investments in their home country.”

Emefiele added that remittance flows to Nigeria are underreported by several money transfer operators.