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The Central Bank of Nigeria (CBN) has taken proactive measures to double foreign-currency remittance flows through formal channels by granting Approval-in-Principle (AIP) to 14 new International Money Transfer Operators (IMTOs).
Mrs. Hakama Sidi Ali, the Director of Corporate Communications, made this announcement in the Federal Capital Territory, FCT, Abuja, on Wednesday.
She emphasized that this initiative aims to enhance the consistent supply of foreign exchange in the official market by fostering increased competition and innovation among IMTOs. This, in turn, is expected to reduce the cost of remittance transactions and promote financial inclusion.
“This move will stimulate liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), contributing to price discovery and enabling a market-driven fair value for the naira,” she stated.
The CBN perceives the augmentation of formal remittance flows as crucial for stabilizing Nigeria’s exchange rate, which has historically experienced volatility due to external factors such as fluctuations in foreign investment and oil export proceeds. Increasing the number of IMTOs is one of the key initiatives spearheaded by the CBN’s remittance task force, led by Governor Cardoso.
The task force, formed following an executive learning session with IMTOs during the World Bank/IMF Spring Meetings in Washington DC in April 2024, aims to collaborate closely with the private sector and market operators to streamline the remittance ecosystem in Nigeria.
Governor Olayemi Cardoso has previously articulated the CBN’s commitment to doubling remittance flows into Nigeria within a year by addressing barriers hindering flows through formal channels. This proactive approach underscores the central bank’s dedication to fostering a conducive environment for remittances, which are a significant source of foreign exchange and contribute over 6% to Nigeria’s GDP.
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