The Central Bank of Nigeria (CBN) said on Wednesday that it has awarded 14 new International Money Transfer Operators (IMTOs) Approval-in-Principle (AIP) in a new drive to quadruple foreign-currency remittance inflows via official channels.
The program will encourage more competition and innovation among IMTOs to cut the cost of remittance transactions and enhance financial inclusion, which will assist raise the sustainable supply of foreign exchange in the official market.
As one of the main sources of foreign exchange and over 6% of GDP, the CBN believes that increasing formal remittance flows would help reduce the historical volatility in Nigeria’s exchange rate brought on by outside factors like changes in foreign investment and oil export earnings.
“This will increase price discovery to enable a market-driven fair value for the naira and spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX),” CBN’s Acting Director of Corporate Communications, Hakama Sidi Ali, stated in a statement announcing the new strategy.
The governor of the CBN, Olayemi Cardoso, recently revealed the goal of the top bank, which he was adamant was achievable: to quadruple remittance flows into Nigeria in a year.
“We are moving quickly to eliminate any obstacles that are permanently obstructing the flow of information through official channels. Working together with important players in the remittance sector, we have a planned course of action and a methodical approach to addressing any upcoming difficulties,” he had declared.
In Nigeria, firms or organizations known as IMTOs are those that the Central Bank of Nigeria (CBN) has allowed to help move foreign exchange payments from foreign-based persons or entities to receivers back home in Nigeria.
The CBN raised the total number of IMTOs from 47 to 62 in 2023.
One of the main initiatives of the CBN’s remittance task force, which is led by Governor Cardoso, is the rise in IMTOs. This cooperative group brings together experts to collaborate closely with market operators and the private sector to make it easier for businesses to conduct transactions in Nigeria’s remittance ecosystem.
During the 2024 World Bank/IMF Spring Meetings in Washington, DC, USA, in April, an executive learning session with IMTOs directly led to the creation of the task force.
The task group will convene regularly to carry out the strategy and track how its actions affect the influx of remittances.
