CBN Extends Incentive Period to Boost Dollar Remittances

The Central Bank of Nigeria (CBN) has announced will continue indefinitely its Naira4Dollar scheme — an incentive program to boost dollar remittances into Africa’s largest economy.

The initiative, which rewards recipients with N5 for every $1 they receive through licensed international money transfer operators and commercial banks, was introduced on March 5 and scheduled to end on May 8.

However, in a circular released by the apex bank on Thursday, CBN said the deadline for receiving the $1 bonus has been extended till further notice.

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“We hereby announce the continuation of the scheme until further notice,” the regulator said in a statement on its website on Thursday.

The initiative was introduced to encourage recipients of dollars to use formal banking channels and help the central bank capture such inflows to boost the local currency stability, which has been under pressure after oil prices plunged last year.

The naira has been devalued three times since last year after a sharp drop in oil earnings, which accounts for 90% of foreign exchange inflows, and remittances from workers abroad led to a dollar crunch in the West African nation, which produces the most crude oil in Africa.

READ ALSO: Naira Crashes Against Dollar As CBN Clampdown On Multiple Exchange Rates

In November 2020, CBN announced that beneficiaries of diaspora remittances through the international money transfer operators (IMTO) will have such inflows in foreign currency (US dollar) through the designated bank of their choice.

The CBN had said the changes are necessary to deepen the FX market, provide more liquidity and create more transparency in the administration of Diaspora remittances into Nigeria.

The Naira for 410.31 on the investors and exporters window, also called Nafex, as of 9:00 a.m. WAT.