Nigerian remittance figures skyrocket after forex changes

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Valentina Vitali
Valentina Vitali
FXC Intelligence Research Analyst
Valentina is a Research Analyst at FXC Intelligence, the data sister company of FXcompared. Valentina is passionate about payments and fintech. Valentin enjoys analysing money transfer companies and… Read more
  • Godwin Emefiele, who heads up Nigeria’s central bank, said that there had been a big uptick in the amount of foreign exchange coming into the country – thanks to steps taken by his organisation to push money transfer providers to offer this service.
  • He confirmed the news at a meeting organised in part by the global investment service Vanguard, which was attended by a range of senior figures from the financial services sector and local government in the country.
  • The steps come as part of a package implemented by the central bank to boost the amount of US dollars that enter the country, which is one of Africa’s largest economies.

The governor of Nigeria’s central bank has confirmed that there has been a sharp rise in the amount of inflowing remittances in the major African nation.

Godwin Emefiele said that the amount of inward remittances coming in each week had gone up from $5m per week to $30m.

He was speaking at an event organised by the investment firm Vanguard along with a committee designed to work on economic growth projects.

A wide variety of figures attended the event, including a range of financial services representatives.

Leaders of local governments from areas across Nigeria also attended via video link.

In his address, Emefiele gave more information about the reasons for the rise in value.

He confirmed that the central bank had taken proactive steps to create the conditions for the rise.

“The CBN has already taken several measures to increase the flow of diaspora remittances into the country using formal channels,” he said.

He added that money transfer providers were told by the bank late last year that they had to open up inward forex services.

“In December 2020, we instructed all international money transfer operators to provide remitters with the option of sending foreign exchange to beneficiaries in Nigeria,” he explained.

“This new measure has helped to reduce the diversion of forex by some IMTOs, who had thrived from forex arbitrage arrangements, rather than on improving transactions volumes to Nigeria.” 

IMTO stands for international money transfer operator.

Nigeria often experiences problems when it comes to forex – the country has recently attempted to tackle this by making the inflow of US dollars easier.

Emefiele said that the central bank’s steps to make this change were working.

“Indeed, we have already seen remittances improve from a weekly average of about $5m before this policy, to over $30m per week,” he said.

He added that the market looked set to become much more liquid as a result of the policies that the bank has enacted.

“We believe this measure will help to significantly boost inflows of forex and create much more liquidity in that space,” he concluded.

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