The Central Bank of Nigeria (CBN)’s Naira4Dollar scheme may have attracted about $40 million in foreign remittances in seven days. According to agency reports, the scheme had performed a lot more than expected as remittances via commercial banks have picked up suggesting Nigerians in the Diaspora have embraced it as the CBN received $40 million last week from remittances, up from about $6 million before the policy was introduced.
The apex bank captures remittances in its Balance of Payment (BOP) report and the Foreign Exchange Flows data. But while the BOP includes non-cash items remitted into Nigeria, the Foreign Exchange Flows Data records cash items only.
This is coming after commercial banks in Nigeria automatically opened domiciliary bank accounts for beneficiaries of diaspora remittances in Nigeria under the CBN’s Naira4Dollar scheme. As the beneficiary receives the inflows, N5 for every dollar remitted is a credit to the naira account of the beneficiary.
Daily Sun Investigations reveal that at $40 million a week, the CBN could be attracting about $160 million a month or $1.9 billion per annum. This will be higher than the estimated $1.1 billion received in 2020 from diaspora remittances but much lower than the $3.2 billion received in 2019.
A $40 million a week inflow suggests most of the dollars are either in domiciliary account of customers or withdrawn and exchanged at the black market.
According to a statement from the Central Bank of Nigeria, remittances paid in dollars and sold on the streets will improve liquidity in the retail end, thus strengthening the exchange rate.
However, latest information suggests the exchange rate between the naira and dollar is N486/$1 higher than the N480/$1 exchanged just before the new policy was introduced.
