The Nigerian Central Bank is paying the recipient that uses the formal channels to get US dollars from foreign countries. The move comes as the latest efforts by the authorities to boost the flow of remittances in the shortage of hard currency.
Recipients will have 5 naira for each %1 they remit using licensed international money transfers operators and commercial banks. The central bank has said in the circular published recently. To find out the best way to send money to Nigeria, you have to operate online and check if you have the feasibility available.
The West African nations have the currency that has been evaluated two times since March in the year 2020 after the sharp drop in the sales of oil and remittances from the workers abroad that led to the shortage of dollars.
The Central Bank of Nigeria has announced its ‘Naira 4 Dollar Scheme’ targeting Diaspora remittances. To sustain the encouraging boosting increases in the inflows of Diaspora remittances in the country, the CBN announces the introduction of the CBN Naira 4 Dollars Scheme as an incentive for recipients’ senders of the international money transfers.
The scheme will then reward all citizens who have used an international money transfer operator 5 Naira that each $1 they get. The citizens will get this reward whether they pick to collect the USD as cash over the counter in any bank or transfer it into the domiciliary account. The promotion then kicked off on March 8 and will run until May 8.
The newest attempt by CBN is to promote the mainstream payment systems that come when it has gone waged full-on war against digital currencies. The central bank has now prohibited the banks from processing the transactions linked to digital currencies.
However, the current promotion is a lot more targeted towards the cutting down of ever-rising market share, which digital currency-powered remittance platforms were gobbling up. As per Nairalytcis, a local data platform, the remittances through mainstream channels have dropped drastically.
In January 2020, the country received a total of $2.05 billion through these channels. This figure has gone half in the next month and has been dropping since then, with the West African Country recording only $54.4 million through the mainstream channels in September.
The considerable drop has now come at a time when the digital currency-powered channels have now recorded a steady rise as well. These platforms that included Centbee’s Minit Money have advantages over the mainstream rivals, including real-time transactions and very minimum fees.
In Nigeria, the benefits extend beyond these. The Nigerian government has now set a fixed exchange rate for all mainstream platforms. Digital currency platforms can now operate on a parallel rate, usually 20% to 30% higher. This makes them highly attractive, especially to those involved in the import and export business.
What Is the Effect of Remittance On The Economy Of Nigeria?
Remittance has become the new process in the global financial systems because of its size and impact. International remittances have been recognized as a critical driver of the economy of most developing countries.
It also plays a vital role in poverty reduction, economic growth, and income distribution, mainly in rural areas. They have reported that the country receives nearly 65% of officially recorded remittance flows in the region and 2 per cent of the global flows. Incentives have also become the best way to to perform online money transfer to Nigeria.