eNaira to boost diaspora remittance flows — CBN

By Kayode Tokede

The Central Bank of Nigeria (CBN) has stated that the eNaira is expected to boost diaspora remittance inflow to the country.

The apex bank in a document titled, “Design paper for the eNaira”, said the eNaira is meant to create a secure and cost-effective process for remittances, amongst other benefits.

The apex bank said, “In Nigeria, it is a key source of foreign exchange as US$23.8 billion flew into the country in 2019.

“The flow of remittance into Nigeria highlights its strategic position in sub–Saharan Africa as it is the top destination for remittance flows.

“Also, the country accounted for a 12.5per cent drop in overall flow to sub-Saharan in 2020 due to its 28per cent decline in 2020 which can be attributed to the COVID-19 pandemic.”

The CBN admitted that because of the importance of remittance flow to economies in sub-Saharan Africa, it had hoped to stimulate remittance inflows with the introduction of its “Naira 4 Dollar” initiative.

“Growth in remittance flow is a key objective of the CBN and this was highlighted by its “Naira 4 Dollar” initiative which incentivized Nigerians by paying them N5 for every US Dollar received via the remittance channel. While that has helped stimulate remittance flows, the issue of cost is still paramount.

“The sub-Saharan Africa region remains the most expensive region in the world to send money to, sending $200 costs an average of 8.2per cent and as high as 19.63per cent,” the CBN stated.

Highlighting how the eNaira will improve diaspora remittances, the apex bank said, “the eNaira would provide a secure and cost-effective process for remittances and ultimately boost remittance flows. It would also reduce the number of remittances flowing through informal channels as the cost of remittance will be significantly low. Ultimately, the eNaira will make remittances easier, faster, and cheaper.”