CBN kick starts strategy to double remittances, grants AIP to 14 New IMTOs

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The Central Bank of Nigeria (CBN) has initiated plans to double the flow of foreign-currency remittances through formal channels by granting Approval-in-Principle (AIP) to 14 new International Money Transfer Operators (IMTOs).

This announcement was made in Abuja on Wednesday by the Bank’s Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali.

Ali explained that this initiative aims to enhance the steady supply of foreign exchange in the official market by fostering greater competition and innovation among IMTOs. This, in turn, is expected to reduce the cost of remittance transactions and promote financial inclusion.

According to her, “This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira.”

It will be recalled that the CBN Governor, Mr. Olayemi Cardoso, had recently declared: “We’ve set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach.

“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry.”

Sidi Ali further stated that the CBN considers boosting formal remittance flows—one of the major sources of foreign exchange, contributing over 6% to GDP—as a strategy to mitigate the historical volatility in Nigeria’s exchange rate caused by external factors such as fluctuations in foreign investment and oil export revenues.

The expansion of IMTOs is a key initiative of the CBN’s remittance task force, led by Governor Cardoso. This task force brings together specialists to collaborate with the private sector and market operators to streamline business operations within Nigeria’s remittance ecosystem.

The task force was formed following an executive learning session with IMTOs during the World Bank/IMF Spring Meetings in Washington DC, USA, in April 2024.

The task force will meet regularly to implement strategies and monitor the impact of its actions on remittance inflows.