The Central Bank of Nigeria (CBN) said on Wednesday that it has granted 14 new International Money Transfer Operators (IMTOs) Approval-in-Principle (AIP) in new effort to to double foreign-currency remittance inflows through formal channels.
The initiative will help increase the sustained supply of foreign exchange in the official market by promoting greater competition and innovation amongst IMTOs to lower the cost of remittance transactions and boost financial inclusion.
CBN’s thinking is really that increasing formal remittance flows which is one of the major sources of foreign exchange, accounting for over 6% of GDP would help ease the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.
“This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira,” said Hakama Sidi Ali, CBN’s Acting Director of Corporate Communications, while announcing the new plan in a statement.
Olayemi Cardoso, CBN Governor had recently disclosed the apex bank’s target to double remittance flows into Nigeria within a year, which he firmly believed was possible.
IMTOs in Nigeria, are companies or organizations which the CBN has authorized to facilitate the transfer of foreign currency funds from individuals or entities residing abroad to recipients back in Nigeria.
In 2023, the CBN increased the number of IMTOs from 47 to 62.
The increase in the number of IMTOs is one of the primary actions initiated by the CBN’s remittance task force, overseen by Governor Cardoso as a collaborative unit which pulls together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria.
The task force was established as a direct result of an executive learning session with IMTOs during the 2024 World Bank/IMF Spring Meetings held in Washington DC, United States of America, in April.