CEM REPORT | The Central Bank of Nigeria (CBN), has revealed that diaspora remittances through the ‘Naira 4 Dollar Scheme’ stood at $2.4 billion in the first eight months of 2022.
The apex bank noted that remittance for this year was better than the entire 2021 which recorded a total of $2.9 billion in remittance through the scheme.
This is according to the Director of Trade and Exchange Department, Central Bank of Nigeria (CBN), Ozoemena Nna at the 33rd Seminar for Finance Correspondents and Business Editors with the theme, “Policy Options for Economic Diversification: Thinking Outside the Crude Oil-Box,” organised by the CBN over the weekend.
She further revealed that the CBN was considering improving the scheme to have a more streamlined approach, which would enhance diaspora remittances in collaborations with other government parastatals.
“In 2021, we were able to record $2.9 billion of cash inflows, so far this year, we have recorded $2.4 billion. So, in half of the year, we have gotten almost what we got in the year 2021.
“We have a component of remittances which include workers’ compensation, anyone that worked in Nigeria, even if you are a Nigerian but are paid in dollars because you work for an embassy or an international organisation, it is counted as a remittance.
“So, there are so many components of remittances. But the component of inflows that comes into this country so far, we are at $2.4 billion.”
Speaking at the event, a Professor of Economics and Capital Market, Uche Uwaleke called on the CBN to tinker with the scheme to increase its benefits and improve remittances into Nigeria by modelling it after the Pakistan model.
“On the ‘Naira4Dollar’ policy, we have seen some successes. We have been told that since its introduction we have seen some accretion to the reserves on account of that.
“However, the central bank should consider the Pakistani model where they introduced something similar but in 2020, moved a step further to introduce a loyalty reward scheme that encourages remittances to benefit from participating companies.
“It should be improved upon to increase remittances. Pakistan for example has increased remittances from $11 billion to $24 billion. So, we can improve if we tinker with the current Naira4Dollar scheme.”
Responding, Ozoemena added that the CBN has had meetings with Pakistan’s monetary authority and has plans to improve the scheme.
“We actually did studies of countries that have implemented remittances schemes and we even had meetings with the Pakistani authority and what they are doing is far broader than what we are implementing here.
“We are taking baby steps because we also know that we don’t have the resources and weight to put on it because it involves both Ministries of Finance and that of Foreign Affairs.”She noted that citizens abroad who benefit from such scheme in Pakistan register with their embassies abroad and have a certain percentage remitted to the country every month in collaboration with their collating ministries in an orderly manner.
“We are talking to agencies in Nigeria including the Ministry of Foreign Affairs, but that conversation hasn’t gotten to a point where it can be implemented.
“So, we are doing the Naira4Dollar and we have seen an increase in the Naira4Dollar in terms of remittances.”
Also at the event, an economist and Chief Economic Strategist in the ECOWAS Commission, Ken Ife, praised the CBN’s Anchor Borrowers’ Programme (ABP), saying its introduction was timely and helped in averting the food crisis in the country.
“We would have been buying a bag of rice today at between N70,000 and N100,000, and if we didn’t have the intervention from CBN, it would not only have been only importing food, we would have had more people dying from hunger, poverty, and starvation in Nigeria than victims of conflict and covid-19 put together.”