The Central Bank of Nigeria (CBN) seems ready to accord deserved respect to Nigerians abroad for their remittances. Yesterday, November 30, 2020, it informed the general public that the beneficiaries of the Diaspora remittances, through the International Money Transfer Operators ( IMTOs), will now receive such inflows in foreign currencies ( US dollars) through the designated bank of their choice. It further stated that such recipients of remittances may have the option of receiving these funds in foreign currency cash ( US dollars) or into their ordinary domiciliary account. That is a proper supply management. It is hoped there will not be a policy reversal or somersault in the near term. This should have been the thing to do earlier on. You don’t treat a sizable segment of your people that brings in about > 20 billion US dollars yearly to the local economy with disdain or confused policy prescriptions. In 2018, the Diaspora remittances dwarfed oil revenues and this will continue as global economy picks and the world attention is shifted away from oil.
India does not joke with her Diasproan remittances (DR); the same with Mexico. Diaspora remittances can be treated identically like invisible exports. Nigeria exports mainly crude oil. It is time Nigeria now got serious about DR.
Furthermore, the attitude of forcing the exporters to sell their export proceeds at the I & E window while the gap between it and the parallel market is close to 100 naira should stop. Round trippers are smiling to banks with profit. This is counterproductive. The point is if DRs are allowed to be withdrawn across the counter without restrictions, the activities at the black market will reduce as flows towards it dry up. Better predictability will come to the market.
Finally President Buhari, his economic team and the CBN should acknowledge the fact that naira value will fall at least in the near term. At present, the Naira Real Exchange Rate is OVERVALUED based on high artificial official exchange rate imposed by the CBN and the run-away Inflation rate. It is clearly impossible and strange for Nigeria to be witnessing high inflation and at the same time depress the official exchange rate. Nigeria needs to make a choice. Most importantly, it needs to have some respect for the DR. Without the DR flowing constantly into Nigeria 🇳🇬, its economy would have long crumbled.
▪︎Ogunniyi, Risk Advisor, writes from Lagos.
Stay ahead with the latest updates! Join The ConclaveNG on WhatsApp and Telegram for real-time news alerts, breaking stories, and exclusive content delivered straight to your phone. Don’t miss a headline — subscribe now!
