CBN Offers N5 per Dollar Incentive to Boost Diaspora Inflows

By Dipo Olowookere

As part of efforts to boost foreign exchange (FX) inflows through diaspora remittances, the Central Bank of Nigeria (CBN) is offering an extra N5 for every Dollar sent to recipients in the country.

The apex bank, in a circular issued on Saturday and signed by A.S Jibrin for the Director of Trade and Exchange Department, disclosed that this reward system will last for two months.

The notice said this initiative is under the CBN Naira 4 Dollar Scheme and was designed to sustain the encouraging increase in inflows of diaspora remittances into the country.

It further said the promo will commence on Monday, March 8 and end on Saturday, May 8, 2021, noting that commercial banks and International Money Transfer Operators (IMTOs) have been carried along.

“In an effort to sustain the encouraging increase in inflows of diaspora remittances into the country, the CBN hereby announces the introduction of the CBN Naira 4 Dollar Scheme, an incentive for senders and recipients of International Money Transfers.

“Accordingly, all recipients of diaspora remittances through CBN licensed IMTOs shall henceforth be paid N5 for every $1 received as remittances inflow.

“In light of this, the CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every $1 remitted by the sender and collected by the designated beneficiary.

“This incentive is to be paid to recipients whether they choose to collect the Dollar as cash across the counter in a bank or transfer the same into their domiciliary account.

“In effect, a typical recipient of diaspora remittances will, at the point of collection, receive not only the Dollar sent from abroad but also the additional N5 per $1 received.

“Please note, having discussed with banks and IMTOs, the scheme takes effect from Monday, March 8, 2021, and ends on Saturday, May 8, 2021,” the circular stated.

Recall that in late 2020, the central bank allowed recipients to receive FX inflows in the currency of the sender’s country.

Before the policy was introduced, foreign inflows were converted to Naira and this made diaspora remittances unattractive, putting pressure on the local currency at the unregulated segment of the forex market.