Nigerians now have opportunity of earning additional Naira from their Dollars in the CBN Naira 4 Dollar Scheme
By Tunde Niyi-Akinmade
You can now earn free Naira from any Dollar you receive from any Nigerian based abroad through any Central Bank of Nigeria (CBN) licensed International Money Transfers Organisations (IMTOs).
Yes. You will receive N5 for every $1 received as remittance inflow in Nigeria through an IMTO, whether you choose to collect the Dollars as cash across the counter in a bank or transfer same into your domiciliary account.
In effect, if you receive $1,000, you get an additional N5,000 as a reward.
This incentive is part of the new “CBN Naira 4 Dollar Scheme’, aimed at encouraging senders and recipients of International Money Transfers.
The scheme takes effect from March 8 and ends on May 8.
In announcing this new policy, the CBN said it shall pay the incentive through commercial banks.
The new policy is aimed at boosting dollar supply in the country. The CBN, as a result of tight foreign exchange supply, has been forced to devalue the Naira more than once a year.
The CBN, in a circular, signed by A.S. Jibrin, its Director, Trade and Exchange Department, and issued to all Deposit Money Banks (DMO) and IMTOs, said the incentives must be paid whether the remittance was collected in naira or not.
“In the light of this, the CBN shall, through commercial banks pay to remittance recipients the incentive of N5 for every $1 remitted by the sender and collected by the designated beneficiary. This incentive is to be paid to recipients whether they prefer to collect the USD as cash across the counter in the bank or transfer the same into their domiciliary account,” the circular reads.
Leading banks in Nigeria have already reached out to the public for patronage under the scheme.
Dr Adesola Adedunta, FirstBank’s CEO, Dr Adesola Adeduntan said the bank is pleased to participate in the CBN’s ‘Naira 4 Dollar scheme’ saying the scheme will contribute to deepening financial inclusion in Nigeria.
“Indeed, it’s an activity we are pleased to lead, whilst promoting access to funds across the nooks and crannies of the country in almost 127 years of our existence. We are delighted to be a gateway to promoting dollar remittances into the country and we encourage our customers, their loved ones and friends to use our international money transfer services which would enable them to enjoy the rewards of this promo, sustaining the increase in inflows of diaspora remittances into Nigeria consequently help in poverty reduction, income redistribution and enhancement of economic growth,” he said.
However, some Nigerians said that even though the policy would encourage more people to bring in money through the official channels, it might not beneficial to the Nigerian economy in the long run.
The organized private sector also believes that the policy might enhance Naira’s value but it to be complemented by other strategies for it to be beneficial to the economy in the long run.
Ambassador Ayo Olukanni, Director-General, the Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), said the policy would help CBN to harness the huge potential of foreign remittances and reduce the pressure on the Naira.
But Olukanni wanted the CBN to exploit other avenues of increasing foreign exchange inflows into the country.
“However, we are of the view that other areas which deserve attention in the quest to increase forex inflow are our non-oil export, which has yet to be fully tapped due to reasons we all know. We hope to see appropriate incentives to boost foreign exchange by scaling up our non-oil exports as we grapple with what should be done to ensure an inflow of forex and shore up the naira.”
Dr Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry, Dr Muda Yusuf, said the apex bank deserves to be commended for the policy as it would help reduce the pressure on the Naira but he asked the CBN to combine this with other strategies for its full effects to be felt by the economy.
“The CBN should go a step further by allowing exporters unfettered access to their export proceeds, whether in foreign exchange or naira. The current practice of imposing the NAFEX rate on export proceeds should be discontinued in the spirit of the current move to incentivise forex inflows.
“Similarly, Foreign Direct Investments and Foreign Portfolio Investments should be allowed greater flexibility in conversion rates of their inflows. A combination of these strategies would have a remarkable impact on foreign reserves, forex liquidity and the naira exchange rate.”
Forecast by PricewaterhouseCoopers (PwC), one of the big four accounting firms, indicated that the ‘Naira-for-Dollar’ policy may increase the country’s foreign remittances to $34.89bn by 2023 if the policies were right.
Nigeria’s Diaspora remittance in 2019 was put at $21bn by the World Bank. Even though the forecast showed that the remittance would have risen to $27.66bn in 2020.
However, the forecast by PwC noted that the growth in remittances is subject to global economic forces, which could spur or hinder the growth of remittance flows, growth in emigration, economic conditions of residing countries and poor economic fundamentals in the Nigerian economy.
“Several countries across the globe, including Nigeria, have developed plans towards attracting investment from their diaspora community for national development. Essentially, the extent to which the diaspora contributes to the developmental affairs of a country will be determined largely by the trust.
“In summary, what is required is a coherent policy framework to harness remittances into generating capital for productive investments for the growth and development of small and micro-enterprises, which will, in turn, create employment. In addition, remittances can be deployed toward philanthropic activities, which can serve as solutions for specific deficiencies in the local infrastructure such as schools, hospitals and roads.”
From the forecast, the highest remittance to Nigeria presently came from the United States, followed by the United Kingdom, Cameroon, Italy, Ghana, Spain, Germany, Benin Republic, Ireland and Canada.