In July 2024, remittance inflows experienced a remarkable increase of 130%, reaching a total of $553 million, as reported by the Central Bank of Nigeria (CBN).

This achievement, as reported by the CBN, signifies the highest monthly remittance inflows ever documented, showcasing a substantial rise compared to the same month in 2023.

This information was shared by Hakama Sidi Ali, the Acting Director of Corporate Communications, on Tuesday, August 20, 2024.

The CBN attributes this increase in remittance inflows to a range of strategic policy initiatives aimed at improving liquidity within Nigeria’s foreign exchange market.

The statement read: “The Central Bank of Nigeria (CBN) has reported a significant increase in remittance inflows, reaching $553 million in July 2024, a 130 per cent increase from the corresponding period in 2023.

“This figure represents the highest monthly total inflows on record and reflects ongoing efforts by the CBN to enhance liquidity in Nigeria’s foreign exchange market.

“The substantial growth in remittance receipts is attributable to policy measures introduced by the CBN to enhance liquidity in Nigeria’s foreign exchange market. These measures include granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller model, and enabling timely access to naira liquidity for IMTOs.

“Diaspora remittances are a crucial source of foreign exchange for Nigeria, supplementing both foreign direct investment and portfolio investments. The CBN’s initiatives have supported continued growth in these inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.”

The Central Bank of Nigeria (CBN) acknowledged that the National Bureau of Statistics (NBS) has indicated a decrease in Nigeria's year-on-year headline inflation rate for the first time in 19 months, reflecting the success of the CBN's monetary policy tightening initiatives.

Additionally, the CBN reaffirmed its dedication to vigilant oversight of market conditions and the necessary adjustments to its policies to maintain a steady flow of remittances, which is essential for the stability of the foreign exchange market.

Recall that, in January 2024, the Central Bank of Nigeria (CBN) issued a circular that eliminated the previous restrictions on exchange rates set by International Money Transfer Operators (IMTOs). Prior to this circular, IMTOs were mandated to quote exchange rates within a range of -2.5% to +2.5% of the previous day's closing rate in the Nigerian Foreign Exchange Market.

By the end of January, the CBN introduced updated guidelines for IMTO operations, which included a significant increase in the application fee for an IMTO license, raising it from N500,000 in 2014 to N10 million, marking an approximate 1,900% increase over the past decade.

Additionally, the CBN established a minimum operating capital requirement of $1 million for foreign IMTOs and an equivalent amount for local operators. IMTOs were previously prohibited from acquiring foreign exchange from the domestic market to meet their obligations. However, a recent circular indicates that this restriction has been lifted, allowing IMTOs to engage in trading on the official market.

Furthermore, the CBN has collaborated with IMTOs to form a Collaborative Task Force aimed at doubling remittance inflows into Nigeria, which reports directly to Yemi Cardoso, the CBN Governor. Recently, the CBN also granted 14 new Approval-in-Principle (AIP) licenses to IMTOs, as stated by the Bank’s Acting Director of Corporate Communications, Hakama Sidi Ali.

The reforms implemented by the Central Bank have focused on streamlining processes, onboarding additional IMTOs, and enhancing measures to boost the supply of foreign currencies. These initiatives have shown positive results, as reflected in the increase in remittance inflows.