The Central Bank of Nigeria (CBN) announced on Wednesday that it has granted Approval-in-Principle (AIP) to 14 new International Money Transfer Operators (IMTOs) as part of an effort to double foreign-currency remittance inflows through formal channels.
This initiative aims to increase the sustained supply of foreign exchange in the official market by promoting greater competition and innovation among IMTOs. The goal is to lower the cost of remittance transactions and boost financial inclusion.
The CBN believes that increasing formal remittance flows, which account for over 6% of Nigeria’s GDP and are a major source of foreign exchange, will help stabilize the country’s exchange rate. This stability is often affected 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, in a statement.
Olayemi Cardoso, the CBN Governor, recently disclosed the apex bank’s target to double remittance flows into Nigeria within a year, a goal he believes is achievable.
“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry,” he stated.
IMTOs in Nigeria are companies authorized by the CBN to facilitate the transfer of foreign currency funds from individuals or entities residing abroad to recipients in Nigeria. In 2023, the CBN increased the number of IMTOs from 47 to 62.
This increase is one of the primary actions initiated by the CBN’s remittance task force, overseen by Governor Cardoso. The task force collaborates with specialists, the private sector, and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria.
The task force was established following an executive learning session with IMTOs during the 2024 World Bank/IMF Spring Meetings held in Washington DC, United States. The task force will meet regularly to continue addressing challenges and advancing the remittance industry in Nigeria.
