- The Central Bank of Nigeria (CBN) has granted preliminary approval to 14 new International Money Transfer Operators (IMTOs) to boost foreign-currency remittance inflows through official channels as the Naira crisis continues.
- This development comes as the country saw a 6.28% decrease in direct foreign exchange (FX) remittances in the first quarter of 2024, totalling $282.61 million versus $301.57 million in Q1 2023.
- In February 2024, the apex bank increased the IMTOs licence application fee from ₦500,000 to ₦10 million while announcing a new minimum operating capital requirement for IMTOs of $1 million for foreign companies.
In January 2023, the CBN released the reviewed guidelines for IMTOs in Nigeria, which restricted them to facilitating only inbound transfers to Nigeria in naira and eliminated the exchange rate cap, allowing IMTOs to use market rate limits for their rates.
Meanwhile, a report stated that nearly half of remittances to Nigeria are made through informal channels, owing to a significant difference between official and unofficial exchange rates.
According to Hakama Sidi Ali, CBN’s Acting Director of Corporate Communications, this development will “spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira.”
CBN Governor Olayemi Cardoso stated that the bank is working to permanently eliminate any bottlenecks that prevent flows through formal channels to increase the supply of foreign exchange with the official market. This fosters competition among operators, lowering the cost of remittance transactions and improving financial inclusion.
The government has recently sought to increase the value of the naira. In February 2024, it blocked Binance and other crypto firms' online platforms to prevent what it sees as ongoing forex market manipulation and illicit fund movements.
On May 14, 2024, operatives from the Lagos Zonal Command of the Economic and Financial Crimes Commission (EFCC) apprehended 13 counterfeit bureau de change operators in Lagos, with one allegedly involved in currency racketeering.
