Foreign Exchange Management: CBN Dangles N5 Per $1 Incentive To Encourage Diaspora Remittances

The Central Bank of Nigeria (CBN) has dangled to the diasporas an incentive of N5 per $1 for every dollar remitted to Nigeria through any of the Deposit Money Banks (DMBs) and International Money Transfer Operators (IMTOs).

The motive certainly, is to boost diaspora remittances into Nigeria against the backdrop of the fall in nation’s exchange rate of the naira.

The apex bank in a circular signed by A.S. Jibrin on behalf of the Director, Trade and Exchange Department, to all DMBs and IMTOs, introduced the incentive “Naira for Dollar Scheme”.

Further, CBN explained that the incentive meant that every recipient of each dollar remitted by the diaspora is entitled to be paid N5 either across the counter when withdrawn or transferred into his or her domiciliary account.

The incentive commences March 8, 2021 and will elapse in May 8, 2021.

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 (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 USD1 received as remittance inflow.

“In light of this, the CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every USD1 remitted by sender and collected by designated beneficiary.

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

Please note having discussed with banks and IMTOs, the scheme takes effect from Monday 8 March 2021 and ends on Saturday 08 May 2021.”