The Central Bank of Nigeria (CBN) has approved the application in principle (AIP) of 14 new International Money Transfer Operators (IMTOs), therefore 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 effort would encourage more competition and innovation among IMTOs to reduce the cost of remittance transactions and enhance financial inclusion, which will assist strengthen the sustainable supply of foreign money in the official market.
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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.”
Continuing, Sidi Ali said that the CBN viewed increasing formal remittance flows— one of the major sources of foreign exchange, accounting for over 6% of GDP—as a means of reducing the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.
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The increase in the number of IMTOs is one of the primary actions initiated by the CBN’s remittance task force, overseen by Governor Cardoso as a collaborative unit pulling together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria.
The task force was established as a direct result of an executive learning session with IMTOs during the World Bank/IMF Spring Meetings held in Washington DC, United States of America, in April 2024.
The task force will meet regularly to implement strategy and monitor the impact of its measures on remittance inflows.
