“The CBN’s decision to restrict international remittances to USD payouts only is the overarching concern of everyone. It certainly limits the number of Nigerian citizens that can conveniently access funds sent from the diaspora. I sincerely hope that CBN reconsiders its position on this, and re-allow Naira payments in cash or into accounts or wallets,” Jay Alabrabra, Chairman of ALMPO, Mr. Jay Alabrabra.
These payment operators are not fair on this request; they are looking out for themselves and not the citizens. Nothing stops any receiver from asking a bank to pay in Naira, and that payment will likely be at a better exchange rate since the bank will know the person can ask for the dollars, and walk out, and change them in bureau de change. Technically, there is no way this new policy is limiting the “number of Nigerian citizens that can conveniently access funds sent from the diaspora”.
What is happening here is clear: CBN asked banks to close the Naira accounts of these operators, and that simply meant they have been disintermediated in the system. As I noted, if the money was sent in US dollars and would be paid in US dollars, the phase in the chain where they operate in Nigeria has been eliminated. By the appeal, they are asking the government to make them relevant again.
But from my understanding, this is what CBN is doing here: in the past, when you wired USD, Euro or any foreign currency from abroad to Nigeria, you were paid in Naira, determined by the CBN official exchange rate. The IMTOs maintained a special purpose naira account to work on that reconciliation between the USD, etc they had received, say in the US and UK. and the naira they have settled in Nigeria.
But under the new CBN policy, where the USD or Euro is paid in the same currency in Nigeria to the recipient, there is practically no need for IMTOs to run a naira account. In other words, they have been disintermediated in the system locally. What happens is this: it is now between CBN and IMTOs offshore offices, and CBN and local banks since one currency is involved. The IMTOs local naira accounts are now redundant and of no value. (They can of course run the usual current and saving accounts).
The apex bank should not listen to them: they can pivot to other sectors in the economy, and not just depend on the arbitration on exchange rate to make a living in Nigeria. Indeed, there are some sectors which Nigeria must be bold to phase out if we expect the economy to be transformed.
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