CBN: Forex Remittance Falls Despite ‘Naira 4 Dollar’ Scheme

The Central Bank of Nigeria, CBN has announced a shortfall in foreign exchange inflows into the country despite the ‘Naira 4 Dollar’ policy the apex bank introduced last year to boost forex remittance into the nation’s economy.

In its quest to boost foreign earnings following the coronavirus headwinds, CBN Governor Godwin Emefiele said in March 2021 that all recipients of diaspora remittances through CBN-licensed international money transfer operators, IMTOs shall be paid N5 for every $1 received as remittance inflow.

Emefiele said the ‘Naira 4 Dollar’ scheme will boost forex supply into the country from the non-oil sector by at least $200 billion within five years.

According to him, “the CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every USD1 remitted by the sender and collected by designated beneficiary.

“This incentive is to be paid to recipients whether they choose to collect the USD as cash across the counter in a bank or transfer same into their domiciliary account.”

But in a report seen by the magazine, the CBN said forex remittance fell to $6.5 billion in April, more than 17 percent short of the $8 billion received from Nigerians working abroad in March.

The report said, “The economy recorded a lower net foreign exchange inflow of $2.63bn, from $3.53bn in the preceding month. Aggregate foreign exchange inflow into the economy fell by 17.3 percent to $6.58bn in April 2022, compared with $7.95bn in March.

“Similarly, total foreign exchange outflow decreased by 11.3 percent to $3.95 billion, from $4.45 billion in the preceding month.”

The CBN also said in the report foreign exchange inflows through the bank declined by 25.6 percent to $2.47 billion, from $3.32 billion, attributed mainly to a 54.3 percent decrease in non-oil components as a result of inflows of $1.25 billion proceeds from government debts in the preceding month, as well as TSA, third-party receipts and other official income.

Autonomous inflows also decreased by 11.4 percent to $4.11 billion from $4.63 billion, due to a decline in invisible purchases, which included ordinary domiciliary accounts ($1.33 billion) and non-oil export receipts ($0.49 billion).

Foreign exchange outflows through the bank declined by 19.3 percent to $2.86 billion from $3.54billion in March, due, largely, to decreases in foreign exchange sales at the Investors and Exporters window, Small and Medium Enterprises intervention, and interbank/invisible foreign exchange windows. Autonomous outflows increased by 20 percent to $1.09 billion from $0.91 billion in March, on account of increased invisible imports.

Net outflows of $0.39 billion were recorded through the bank in April 2022, compared with net outflows of $0.23 billion in the previous month, the report said.

Meanwhile, analysts insist that the forex inflows into the country for the period may actually be more than the apex bank’s figure considering that most remittances are done through the unofficial window.