CBN extends its popular naira-for-dollar incentive programme indefinitely to boost diaspora remittances

CENTRAL Bank of Nigeria (CBN) officials have indefinitely extended the popular naira-for-dollar incentive programme recently introduced in a bid to encourage diasporans to increase the volume of their remittances.

With the Nigerian economy in dire straits as a result of the global economic meltdown precipitated by the coronavirus pandemic, the country is becoming increasingly dependent on diaspora remittances. Diaspora remittances are currently the biggest source of foreign exchange in Nigeria today, with about $25bn being sent in annually.

In a bid to increase their flow, the CBN introduced a naira-for-dollar policy in December that grants unfettered access to foreign exchange sent from the diaspora and other money transfer remittances that come into the country through the likes of  Western Union and MoneyGram. Aimed at ensuring dollar inflows pass through commercial banks, instead of unofficial channels, the policy has resulted in a $404m boost in foreign reserves.

Under the policy, the CBN gives a N5 rebate for every $1 sent by Nigerians in diaspora to the country, which is paid directly to the account of the beneficiaries. Yesterday, the CBN announced an extension to this naira-for-dollar incentive until further notice.

Saleh Jibrin, the CBN's director of trade and exchange, said that all aspects of the operations of the scheme were to remain the same. When originally introduced on March 8, the scheme was a temporary one due to end on May but given its popularity, the CBN has been forced to keep it in place.

Mr Jibrin added: “In an effort to sustain the encouraging inflows of diaspora remittances into the country, the CBN hereby announces this scheme as an incentive for senders and recipients of international money transfers. This incentive is to be paid to recipients whether they choose to collect the dollar as cash across the counter in a bank or transfer same into their domiciliary account."