Nigeria: IMTO Inflows Surge by 63.7% in Nine Months – CBN

The Central Bank of Nigeria (CBN) has reported a 63.7% rise in inflows from International Money Transfer Operators (IMTOs) during the first nine months of 2024.

Data from the CBN’s latest quarterly statistical bulletin indicates that inflows increased from $2.33 billion in the same period of 2023 to $3.82 billion in 2024.

This significant growth has been attributed to various reforms initiated under the leadership of Governor Olayemi Cardoso, who assumed office in September 2023.

A month-by-month analysis of the inflows revealed a consistent upward trajectory throughout the year:

• January: Inflows climbed 32.4% to $390.86 million, up from $295.21 million in 2023.
• February: Inflows surged by 67.4% to $326.91 million, compared to $195.23 million in the previous year.
• March: A 30% increase brought inflows to $363.76 million, from $279.79 million in 2023.
• April: A record 83.3% growth saw inflows reach $466.11 million, compared to $254.26 million the year prior.
• May: Inflows grew by 45.3% to $404.75 million.
• June: A 40.2% rise brought inflows to $389.79 million.
• July: Inflows more than doubled, reaching $552.94 million, a 130% increase from $240.35 million in 2023.
• August: Inflows peaked at $585.21 million, reflecting a 115.8% rise from $271.24 million.
• September: Inflows reached $336.61 million, a 40.9% increase from $238.98 million in the same month last year.

These figures underscore the effectiveness of the central bank’s reforms in enhancing remittance inflows, which are critical for bolstering Nigeria’s external reserves and overall economic stability.

Policy Reforms Boosting IMTO Inflows

In January 2024, the CBN issued a circular removing the cap on exchange rates quoted by IMTOs. Previously, IMTOs were required to operate within a ±2.5% range of the previous day’s closing rate in the Nigerian Foreign Exchange Market.

Later in the same month, the CBN released revised guidelines for IMTO operations, introducing significant changes:

• The application fee for an IMTO license was raised from ₦500,000 in 2014 to ₦10 million in 2024, a 1,900% increase over the decade.
• A minimum operating capital requirement of $1 million was mandated for both foreign and local IMTOs.
• Initially, IMTOs were barred from purchasing foreign exchange from the domestic market to meet obligations. However, a subsequent circular lifted this restriction, allowing IMTOs to participate in the official foreign exchange market.

Collaborative Efforts to Double Remittance Inflows

The CBN established a Collaborative Task Force with IMTOs, reporting directly to Governor Cardoso. This initiative fosters competition, engages the Nigerian diaspora, and enhances transparency in foreign exchange transactions.

Additionally, the CBN has granted 14 new approvals in principle to IMTOs, onboarded more operators, and streamlined operational processes to strengthen the remittance ecosystem.

These measures have not only improved the supply of foreign currency but also enhanced confidence in the country’s financial system.

As remittance inflows continue to rise, the CBN’s proactive reforms reaffirm its commitment to driving economic growth and stability through innovative regulatory policies.