The Naira4dollar policy, introduced by the Central Bank of Nigerian on March 8, is expected to end come May 8.
But within such a short space of time, the policy’s impact on Nigerians has made them to clamour for its extension.
For instance, Mr Ugochukwu Okoro, a FirstBank customer, said he was not aware of the Naira4dollar promo until he received money from his brother in the United States of America.
Okoro said he was surprised when his account was credited and upon enquiry he was told it was the fallout of the Naira4dollar scheme introduced by the apex bank to boost Diaspora remittance.
While he applauded FirstBank’s seamless service delivery and reward to its customers, Okoro urged the CBN to extend the policy to enhance awareness for the needed impact to be felt.
Similarly, Mrs Blessing Adebayo, another FirstBank customer, who lauded the initiative, said she was amazed when her brother sent money to her and she was rewarded.
Adebayo said she received N25, 000 in cash on 5,000 dollars sent by her brother in the Diaspora to meet family needs.
Just as the policy is gradually coming to an end, many Nigerians who have benefited from it and those yet to, believe the apex bank should review its impact and consider an extension for more Nigerians in the Diaspora to take advantage of the initiative.
Financial experts have weighed in on the call for the apex bank to extend the timeline of the scheme.
Chief Operating Officer, InvestData Ltd., Mr Ambrose Omordion, was emphatic that the CBN should review the policy and extend its timeline for better result or effect.
His reasons are not far-fetched. He said the introduction of Naira4dollar by CBN in seven weeks had not done much to support exchange rate stability as the rates continued to fluctuate within this period.
He noted that the devaluation of naira over time had continued to weaken the nation’s currency and encouraged imported inflation, which invariably led to today’s galloping inflation rate of 18.17 per cent.
He is, therefore, of the view that the scheme should be extended to encourage Nigerians in the Diaspora to remit more into the country and also improve foreign exchange inflows.
Indeed, when the CBN introduced the Naira4dollar policy to boost Diaspora remittance into the nation, the overriding objective was that it would stabilise the exchange rate.
The expectation of the CBN governor, Mr Godwin Emefiele, was that the policy would enlarge the scope of foreign exchange inflows into the country to support the external reserves.
Even before the introduction of the scheme, the apex bank had in December 2020 introduced a policy that allowed beneficiaries of remittances from abroad to receive cash payments in the foreign currency of their choice.
In a circular announcing the policy, the CBN said: “International Money Transfer Operators, IMTOs must ensure that all funds in favour of beneficiaries/recipients in Nigeria be deposited into the Agent Banks’ correspondent account.
“Agent Banks (Deposit Money Banks) in Nigeria will be responsible for the payment to beneficiaries/recipients either in foreign currency cash (USD) or into the beneficiaries/recipients’ domiciliary account in Nigeria.
“The mode (of payment either in cash or transfer) is at the sole discretion of the beneficiaries/recipients,” said the circular.
The expectation of the apex bank is that the policy will deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of Diaspora remittances into Nigeria.
Consequently, to complement this policy, especially in terms of encouraging Nigerians in the Diaspora to patronise official channels for remittance transfers, the Naira4dollar scheme was introduced.
According to Emefiele, the Naira4dollar policy gives N5 rebate for every 1dollar sent by Nigerians in the Diaspora to the country, which is paid directly to the account of the beneficiaries, following the receipt of the remittance inflows.
The CBN had promised that the new policy would provide Nigerians in the Diaspora with cheaper and more convenient ways of making remittances to Nigeria.
Defending the dollar policy, Emefiele said the move was also to increase the transparency of remittance inflows and reduce rent-seeking activities.
He was optimistic that the new policy would encourage banks and financial institutions to develop products and investment vehicles, geared toward attracting investments from Nigerians in the Diaspora.
Reiterating the provision in a new circular on remittances, the CBN boss said the bank introduced the rebate of N5 for every 1dollar of fund remitted to Nigeria, through International Money Transfer Operators (IMTOs) licensed by the CBN in order to incentivise the process of remittance.
Emefiele explained that the new measure would help to make the process of sending remittance through commercial bank channels cheaper and more convenient for Nigerians in the Diaspora.
The policy was sweet music to some commercial banks; they soon latched onto it, ensuring seamless flow of Diaspora remittances.
First Bank of Nigeria Ltd., Access Bank Plc, United Bank for Africa, Fidelity Bank Plc and Zenith Bank Plc, among others partnered IMTOs to ensure the success of the scheme.
In no time, FirstBank partnered many IMTOs such as Western Union, RIA, WorldRemit, MoneyGram, Transfast and AWS Malta to ensure increased participation.
The bank aligned it processes with over 12 new IMTOs to support the apex bank’s initiative aimed at boosting foreign exchange and financial inclusion.
Speaking on the initiative, FirstBank’s Chief Executive Officer, Dr Adesola Adeduntan said “at FirstBank, we are pleased to participate in the CBN’s Naira4Dollar scheme as it 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.
“It will 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,” Adeduntan said.
He noted that the bank pioneered international funds transfer and remittances over 25 years ago and had been in the forefront of promoting cross border payments in the country, having started the journey with Western Union Money Transfer.
Adeduntan said the bank’s wealth of experience and operation in over 750 locations nationwide gave it an edge in the market.
He said the bank recently launched the First Global Transfer product to promote international transfer of funds across its subsidiaries in sub-Saharan Africa.
The bank’s subsidiaries in Africa include FBNBank DRC, FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, FBNBank Senegal.
Adeduntan said all the bank’s sell money transfer products, noting that N100 billion worth of transaction was carried out in 2020 involving over one million customers.
Also, Access Bank Plc in March unveiled a reward scheme for its customers to promote Diaspora remittances into country.
Access Bank’s Executive Director Retail Banking, Mr Victor Etuokwu, said the bank would be rewarding customers with five naira on every one dollar received from their loved ones or associates abroad through foreign remittances.
He said the five naira for every dollar cashback would be paid to Access Bank customers irrespective of their preference to receive funds as US dollars cash pick-up over the counter or direct transfer into their domiciliary accounts.
According to him, the reward scheme is in line with the CBN’s “Naira4Dollar scheme” aimed at encouraging inflow of Diaspora remittances into the country.
“Remittance services are a key aspect of our economy and it is still vibrant and viable today because people still take care of family members, loved ones, friends and invest at home even as they live abroad,” he said.
From all indications, the Naira4Dollar scheme has had a fair outing so far, hence when it comes up for review, the apex bank is expected to extend its timeline for the benefit of all the stakeholders, and in the overall interest of the economy.