In a significant shift, International Money Transfer Operators (IMTOs) and banks in Nigeria have ceased dollar payments to customers, opting instead to pay in naira for diaspora remittances.
This move comes following the Central Bank of Nigeria’s (CBN) issuance of revised guidelines for IMTOs on January 31, prompting a transition towards naira payments for inbound money transfers.
Several banks have already started implementing this directive, informing their customers that they will no longer receive dollar remittances from family and friends abroad.
Ecobank Nigeria, among the compliant banks, issued a notice to customers regarding the changes in international money transfer operations. The notice highlighted that all inbound money transfers to Nigeria through approved IMTOs would be disbursed solely in naira, either through bank accounts or cash transactions at prevailing exchange rates.
Under the revised guidelines, the CBN restricts IMTOs from facilitating outbound transfers and mandates that beneficiaries of inbound remittances receive payments exclusively in naira, with amounts exceeding $200 to be credited to recipients’ bank accounts.
IMTOs, as designated entities approved by the CBN, facilitate fund transfers from individuals or entities overseas to beneficiaries in Nigeria, disbursing corresponding sums through a designated clearing network.
The CBN’s directive aims to streamline remittance processes, enhance transparency, and consolidate efforts to combat dollarization within the Nigerian economy. By transitioning remittance payments to naira, the CBN seeks to optimize foreign exchange liquidity in the official market and discourage arbitrage opportunities in the parallel market.
In response to the regulatory change, IMTOs such as WorldRemit and Sendwave have updated their platforms to reflect the transition, notifying customers of the shift to naira payments for remittances.
Industry experts and stakeholders have expressed support for the CBN’s initiative, citing its potential to mitigate dollar scarcity and promote stability in the foreign exchange market. They emphasize the importance of effective oversight and monitoring to ensure compliance with the new guidelines and prevent circumvention of the regulations.
While acknowledging the need for increased forex supply to address underlying liquidity challenges, stakeholders remain optimistic about the long-term impact of the CBN’s directive on the remittance landscape and overall economic stability.
As the transition to naira payments gains traction, stakeholders anticipate continued collaboration between regulatory authorities, financial institutions, and IMTOs to uphold transparency, foster financial inclusion, and safeguard the integrity of Nigeria’s financial ecosystem.