International money transfer operator (IMTO) inflows for the first nine months of 2024 increased by a noteworthy 63.7%, according to the Central Bank of Nigeria’s (CBN) most recent quarterly data bulletin.
Between 2023 and 2024, inflows increased from $2.33 billion to $3.82 billion.
A number of focused changes implemented under the direction of Governor Olayemi Cardoso, who took office in September 2023, have been primarily responsible for this expansion.
What The Data Indicates
- The data’s year-over-year analysis shows steady rises in monthly remittance inflows for the entire year 2024. Inflows increased from $295.21 million in 2023 to $390.86 million in 2024 in January, a 32.4% increase. With a startling 67.4% increase to $326.91 million from $195.23 million the year before, this rising trend persisted in February. March had a 30% increase, coming in at $363.76 million as opposed to $279.79 million in 2023.
- One of the biggest year-over-year increases occurred in April, when inflows increased by 83.3% from $254.26 million in 2023 to $466.11 million. Inflows increased by 40.2% to $389.79 million in June after growing by 45.3% to $404.75 million in May. In July and August, the growth trend was even more noticeable, with inflows increasing by more than 100% every month. August saw a peak of $585.21 million, a 115.8% rise from $271.24 million, while July saw $552.94 million, down from $240.35 million in 2023. With inflows of $336.61 million at the end of September, the nine-month period saw a 40.9% increase from $238.98 million in September 2023.
- Despite minor oscillations, a month-over-month examination of 2024 data shows a generally positive trend in remittance inflows. In January, inflows totalled $390.86 million, but in February, they fell 16.4% to $326.91 million. Inflows rebounded in March, rising 11.3% to $363.76 million. In April, inflows increased by 28.1% to $466.11 million, maintaining this trend. Nevertheless, May saw a minor decline of 8.3% to $404.75 million, followed by a 7.8% increase in June to $389.79 million.
- July saw the biggest month-over-month rise, with inflows rising 41.8% to $552.94 million. With a 5.8% increase to $585.21 million, the biggest monthly inflow over the nine-month period, August maintained the rising trend. In contrast to August’s record, inflows decreased 42.5% to $336.61 million in September.
What To Note
- The measures implemented by the CBN under Governor Cardoso since taking office in September 2023 are directly responsible for the spike in IMTO inflows.
- The CBN lifted the prior cap on currency rates quoted by IMTOs in a circular published in January 2024.
- Prior to the circular, IMTOs had to quote rates that fell between the acceptable range of -2.5% and +2.5% around the closing rate of the Nigerian Foreign Exchange Market the day before.
- The apex bank also published updated instructions for IMTO operations by the end of January. According to the updated guidelines, the apex bank raised the application fee for an IMTO licence from N500,000 in 2014 to N10 million. In around ten years, this represents a rise of 1,900%.
- A minimum operational capital requirement of $1 million for international firms and an equivalent sum for local IMTOs was also set by the CBN.
- In order to accomplish their responsibilities, IMTOs were also prohibited from buying foreign currency on the domestic market.
- But according to a new circular, this prohibition has been abolished, and IMTOs are now able to trade on the official market.
- In order to quadruple remittance inflows into the nation, the apex bank and IMTOs previously agreed to form a Collaborative Task Force. Yemi Cardoso, the governor of the CBN, is the direct reporter of the task team established to quadruple remittance inflows into Nigeria.
The CBN has bolstered the remittance ecosystem by boosting competition among IMTOs, interacting with the diaspora, and improving transparency in foreign exchange transactions.
Additionally, the Bank’s Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, stated that the CBN recently awarded 14 additional Approval-in-Principle (AIP) to IMTOs.
Simplifying procedures, onboarding additional IMTOs, and strengthening efforts to guarantee a rise in the supply of foreign currencies are some of the Central Bank’s initiatives.
The significant rise in remittance inflows shows that these actions have clearly been successful.
Nigeria’s economy depends on this increase in remittance inflows since it supports household income and provides much-needed foreign money.
