PricewaterhouseCoopers PwC has predicted that the new Central Bank of Nigeria’s CBN ‘Naira-for-Dollar’ policy may attract $34.89 billion to the country’s foreign remittances by 2023 if the strategies were applied correctly.
The CBN had disclosed in a circular during the weekend that it will pay an additional N5 per USD to recipients of money transfer from Nigerians living abroad through CBN approved money transfer channels.
The circular released by the Trade and exchange department of the CBN to all deposit money banks, international money transfer operators IMTOs and the general public with the number TED/FEM/PUB/FPC/01/003 was titled “introduction of the CBN’s naira 4 dollar scheme, for diaspora remittances” and signed by A. S. Jibrin for director of trade and exchange department of the apex bank.
According to the circular “in an effort to sustain the encouraging increase in inflows of diaspora remittances into the country, the Central Bank of Nigeria, hereby announces the introduction of the “CBN Naira 4 dollar scheme” an incentive for senders and recipients of international money transfer.”
“Accordingly, all recipients of diaspora remittances through CBN licenced IMTOs, shall henceforth be paid N5 for every dollar received as remittance inflow.
“In the light of this, the CBN shall, through the commercial banks pay to remittance recipients N5 for every USD1 received by sender and collected by the designated beneficiary.”
The apex bank explained that the incentive is to be paid to recipients whether they choose to collect the USD as cash across the counter in a bank or transfer the same to their domiciliary account.
This implies that the beneficiary of diaspora remittances will, at the point of collection, receive not only the USD sent from abroad but also the additional N5 per USD received.
It, however, noted that the scheme takes effect from Monday 8 March 2021 and ends on Saturday 8 May 2021.
It would be recalled that the World Bank put Nigeria’s Diaspora remittance in 2019 at $21bn.
According to the PwC predictions, the rate of remittances is a matter of global economic forces.
This is given that economic forces could make or mar the flow of remittance, growth in emigration, economic conditions of residing countries and poor economic fundamentals in the Nigerian economy.
The forecast, however, disclosed that as of 2017, the highest remittance to Nigeria, came from the United States, tailed by the United Kingdom, Cameroon, Italy, Ghana, Spain, Germany, Benin Republic, Ireland and Canada.
According to the PWC, “Several countries across the globe, including Nigeria, have developed plans towards attracting investment from their diaspora community for national development.”
“Essentially, the extent to which the diaspora contributes to the developmental affairs of a country will be determined largely by the trust.”
“In summary, what is required is a coherent policy framework to harness remittances into generating capital for productive investments for the growth and development of small and micro-enterprises, which will, in turn, create employment.”
“In addition, remittances can be deployed toward philanthropic activities, which can serve as solutions for specific deficiencies in the local infrastructure such as schools, hospitals and roads.”
The CBN, which announced the reduction of N5 for every $1 of fund remitted to Nigeria through IMTOs, has agreed with the PwC’s prediction through its verified Twitter handle at the weekend.
As they accepted that improved remittances to the country can only be achieved through improved infrastructure facilities and the right policies.
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