CBN ACTIVATES PLAN TO DOUBLE REMITTANCES, GRANTS AIP To 14 NEW IMTOs

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The Central Bank of Nigeria (CBN) has approved the application in principle (AIP) of 14 new International Money Transfer Operators (IMTOs), thereby initiating preparations to treble the amount of foreign currency remittance flows through official channels.

Mrs. Hakama Sidi Ali, the bank’s acting director of corporate communications, made this announcement in Abuja on Wednesday.

According to Ali, the initiative will encourage more competition and innovation among IMTOs to reduce the cost of remittance transactions and enhance financial inclusion, which will help strengthen the sustainable supply of foreign money in the official market.

According to her, “This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira.”

It will be recalled that the CBN Governor, Mr. Olayemi Cardoso, had recently declared: “We’ve set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach.

“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry.”

Sidi Ali went on to state that the CBN saw formal remittance flows—which constitute one of the main sources of foreign exchange and account for over 6% of GDP—as a way to lessen the historical volatility in Nigeria’s exchange rate brought on by outside variables like changes in foreign investment and oil export earnings.

One of the main initiatives of the CBN’s remittance task force, which is led by Governor Cardoso, is the rise in IMTOs. This task force is a cooperative group that brings together experts to collaborate closely with the private sector and market operators to promote ease of doing business in Nigeria’s remittance ecosystem.

During the World Bank/IMF Spring Meetings in Washington, DC, USA, in April 2024, an executive learning session with IMTOs directly led to the creation of the task force.

The task group will convene on a regular basis to carry out the strategy and track how its actions affect the influx of remittances.