In a move aimed at boosting domestic currency liquidity, the Central Bank of Nigeria (CBN) has barred International Money Transfer Operators (IMTOs) from paying Nigerians in US dollars. This policy shift effectively ends the long-standing practice of receiving diaspora remittances directly in dollars.
The new requirement, in line with revised CBN guidelines for international money transfer operations, mandates that all foreign currency remittances be converted to Naira before payout. This applies to transactions exceeding $200, which must be deposited directly into bank accounts, while smaller amounts can be disbursed as cash upon proper identification.
Major IMTOs like WorldRemit and Sendwave have already begun informing their customers about the change and have updated their apps to reflect the new Naira-only option. WorldRemit’s statement emphasizes the CBN directive, while Sendwave encourages users to switch to Naira transfers.
“We can no longer support transfers in USD – only in Naira. If you’re about to send money to Nigeria – this is important.
“The Central Bank of Nigeria (CBN) has directed that it’s no longer possible for any money transfers to be paid out in USD in Nigeria”, reads a WorldRemit notice to customers.
A similar notice by Sendwave reads: “In compliance with a recent directive from the Central Bank of Nigeria (CBN), we regret to inform you that Sendwave, along with all money transfer operators, is no longer able to support USD transfers to Nigeria. We’d encourage you to switch to sending Naira transfers instead”.
This policy aligns with the CBN’s earlier directive instructing banks to pay international dollar payouts in Naira. The aim is to increase the availability of foreign exchange within the Nigerian economy, potentially stabilizing the naira’s value.
This shift is expected to impact Nigerians receiving remittances from abroad. While some may welcome the convenience of receiving funds directly in Naira, others might face challenges due to potential exchange rate fluctuations and the need for bank accounts.
For Nigerians residing abroad, sending options are now limited to Naira transfers and may necessitate budget readjustment.
Earlier, CBN had dramatically increased the application fee for licensing IMTOs by 1,900%, from N500,000 to N10 million.
Facing a 1,900% hike in licensing fees and the ban on dollar payouts, IMTOs are adapting to the new regulatory landscape. Many are expected to focus on facilitating efficient and cost-effective Naira transfers while ensuring compliance with the revised guidelines.
The CBN’s policy shift raises questions about its long-term impact on the remittance market and the broader Nigerian economy. While the stated goal is to boost forex liquidity, the consequences for individuals and businesses remain to be seen. The effectiveness of this policy and its potential adjustments will be closely monitored in the coming months.
Over 40 authorised IMTOs operate in Nigeria, including major international money transfer companies such as Western Union, MoneyGram, PayPalRia Financial, TransferWise, WorldRemit and others.
