The Chairman/CEO of the Nigerians in Diaspora Commission (NIDCOM), Hon. Abike Dabiri-Erewa, has praised the Central Bank of Nigeria (CBN) for its new payout policy, describing it as a significant boost to diaspora remittances and a further testament to the encouragement provided by President Bola Ahmed Tinubu’s administration.
In a statement issued by Abdur-Rahman Balogun, the head of media and public relations at NIDCOM, Dabiri-Erewa highlighted that the approved naira payouts would motivate Nigerians in the diaspora to send more money back home for developmental projects rather than on consumables.
The NIDCOM chairman also emphasised the advantage of the new CBN policy, which allows individuals to receive open market rates instead of solely relying on official rates when sending money through banks from abroad.
Recalled that the Central Bank of Nigeria approved naira payouts for diaspora remittances, effectively lifting a ban that had been in place since December 2020.
According to a circular dated July 10, 2023, the Central Bank of Nigeria sanctioned the payment of naira to beneficiaries of diaspora remittances, enabling banks and International Money Transfer Operators (IMTOs) to pay their recipients in naira after a three-year prohibition.
The December 2020 ban prohibited banks and IMTOs from making naira payments to recipients and stipulated that only banks could transfer funds to the intended beneficiaries. This policy effectively disrupted the business model of various digital remittance companies that facilitated direct transfers to naira accounts.
Following the “Naira payment ban,” the CBN introduced the naira for dollar scheme in March 2021 as part of its efforts, led by Godwin Emefiele, to encourage diaspora remittances to flow through formal channels and boost foreign exchange liquidity. By requiring foreign currency payments to recipients, the CBN aimed to eliminate unlicensed IMTOs from the market.
This recent removal of the ban marks another step toward loosening the strict control that the CBN has exercised over foreign exchange rates in the past five years. It also provides greater flexibility for customers who can now choose between receiving their funds in foreign currency, eNaira, or Naira. Customers who opt for naira payouts will be paid based on the Investors & Exporters Window rate on the day of the transaction.
According to reports from the World Bank, the Nigerian diaspora community remitted a total of $168.33 billion to the country between 2015 and 2022, underscoring the significant role of remittances in the Nigerian economy.
