“Further to the CBN Circular referenced TED/FEM/PUB/FPC/01/003 dated 05 March 2021 on the above subject matter, which was originally scheduled to end on May 8, 2021, we hereby announce the continuation of the scheme until further notice,” noted the Central Bank of Nigeria. Simply, CBN is expanding the horizons to attract US dollars. Yet, there are many skeptics.

Chief Executive Officer of Financial Derivatives Company Bismarck Rewane described the scheme as a ‘promo gimmick’, and “unusual”: “The Central Bank would probably understand in the end that there is no other way of managing an exchange rate than having one rate so that people would stop exploiting it.”

Nigeria’s diaspora remittance is currently estimated at $25 billion, and the central is targeting at least $30 billion annual remittance to curtail COVID-19 strains on the economy. Some experts believe the move will help the African largest economy to stay afloat amidst decline in oil revenue.

“The projection is that very soon, we can hit as much as $30 billion in terms of diaspora remittances annually which can be directed at investments at home. The chambers of commerce, which is located all over the country, is a solid platform through which these diaspora remittances can be channeled into developmental purposes,” Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) Ayo Olukanni said.

For me, Naira will not advance unless Nigeria begins to make things. All the financial engineering in CBN headquarters is hopeless in the long-term. Naira will be saved through factories and warehouses, and we hope CBN and the government will help those communities.

The Central Bank of Nigeria (CBN) has extended the deadline for the Naira 4 Dollar scheme introduced in March to boost diaspora remittances.

The apex bank announced in a statement that the scheme, which was scheduled to end on May 8, would continue until further notice.

The circular, signed by Director, Trade and Exchange Department, CBN, Saleh Jibrin, stated: “Further to the CBN Circular referenced TED/FEM/PUB/FPC/01/003 dated 05 March 2021 on the above subject matter, which was originally scheduled to end on May 8, 2021, we hereby announce the continuation of the scheme until further notice.”

The scheme offers recipients of diaspora remittances through CBN’s International Money Transfer Operators (IMTO)s, N5 for every $1 received as remittance inflow.

The extension has come amidst a growing economic crisis that has seen the naira in free fall, forcing the apex bank to take drastic measures to curb the shocks.

However, experts believe the naira 4 dollar scheme is far from the solution to Nigeria’s forex and economic crisis.

Chief Executive Officer of Financial Derivatives Company Bismarck Rewane described the scheme as a ‘promo gimmick’, and “unusual.”

“The Central Bank would probably understand in the end that there is no other way of managing an exchange rate than having one rate so that people would stop exploiting it,” said Rewane.

Naira fell against the US dollar to close at N411 to a dollar on Thursday, representing a 50 kobo decline when compared to N410.5/$1 that was recorded on Wednesday. But it has gained more than N4 as of Friday, trading at N406.6746/$1 at the interbank market.

Meanwhile, the naira maintained stability at the parallel market, trading at N485/$1, while Nigeria’s external reserve plunged $28.94 million to close at $34.76 billion on Wednesday.

The cryptocurrency effect

The impact of cryptocurrency in the declining diaspora remittances through regulated financial institutions is among the reasons why the CBN ban crypto trading and introduced the naira 4 dollar scheme. However, more than four months after the ban, and three months after the scheme was launched, Nigerian Peer-to-peer (P2P) transaction volume has risen to a defiant height.

Paxful, a peer-to-peer trading platform, said Nigeria’s cryptocurrency traded volumes on the platform topped $1.5 billion in the first four months of the year 2021. This figure represents almost a third of Paxful’s global total volume of $5 billion. This latest traded volume also signals that more Nigerians are switching to P2P, defying CBN’s attempt to curtail the shift of diaspora remittance from conventional financial system to cryptocurrency.

Nigeria thus retains its status as one of the biggest cryptocurrency markets globally.

Nigeria’s diaspora remittance is currently estimated at $25 billion, and the central is targeting at least $30 billion annual remittance to curtail COVID-19 strains on the economy. Some experts believe the move will help the African largest economy to stay afloat amidst decline in oil revenue.

“The projection is that very soon, we can hit as much as $30 billion in terms of diaspora remittances annually which can be directed at investments at home. The chambers of commerce, which is located all over the country, is a solid platform through which these diaspora remittances can be channeled into developmental purposes,” Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) Ayo Olukanni said.

But the indefinite extension of the scheme is also seen as a sign of Nigeria’s vulnerability amidst heightening economic turmoil. The Nigerian National Petroleum Corporation (NNPC) said last week there will be no FAAC, distribution of revenue allocation to states and local governments in May, underlying how empty the government purse is. The government is therefore, besides borrowing, appears to be counting on diaspora remittances to spur economic growth.

Good People, join me as we welcome Ahmadu Bello University (ABU Zaria) students to Tekedia CollegeBoost, a Tekedia Mini-MBA designed for students. Your university has prepared you all, Tekedia will simply expand your horizons on market systems. As we begin the academic excursion on Monday, we are very confident that new vistas will emerge and young people will advance the wealth in nations. Welcome!

Tekedia CollegeBoost is an Advanced Diploma in Business Administration designed for students in colleges. It involves an 8-week program which could be broken into two semesters or taken in one semester, depending on the arrangement with the school or group of students. This course is only offered to a group of students.

Schools, to join Tekedia CollegeBoost, connect here via email .

Thank you Jollof Republik, Texas, USA for sponsoring 10 students to Tekedia Mini-MBA which begins June 7 to end Sept 1, 2021. At Tekedia Institute, we thank you for investing in the future of the youth; you are a Funder of the Future.

Jollof Republik  is uniting people of a colorful heritage. It guarantees an authentic cultural experience, an opportunity to create impactful relationships, and a community that builds bridges and harnesses our collective strengths.

This scholarship is for current students in any university in Africa. Youth Up will do the selection and send the ten names to the Institute. (If your non-profit has structures to find in-need people or students for academic scholarships, email my team to be included in our recruitment system.)

Jollof Republik, we wish you open markets and opportunities as you continue to serve your customers, and bless humanity. Thank you for your partnership.

Good People, join me to  welcome Saima Khan, a partner in Toronto-based Strategic Pricing Management Group (SPMG), to Tekedia Institute as a Finance Faculty, focusing on pricing, revenue growth and profitability.

SPMG is a global leader in the development of value-based strategies. The firm provides value-based solutions to its clients with unique guidance and insights for their pricing and marketing strategies and tactics.

Saima builds profit models and helps global firms strategically optimize profitability while accelerating revenue. She holds a Master’s Degree in Finance from Harvard University.

This course has been added in Tekedia Mini-MBA next edition which begins June 7. We expect it to help business leaders, entrepreneurs and founders acquire capabilities on how to maximally price their products and services without any adverse effect on growth.

Register for Tekedia Mini-MBA here.