CBN Declares $553 Million Remittance Inflows Amid FX Reforms

James Emejo in Abuja and Nume Ekeghe in Lagos

The Central Bank of Nigeria (CBN) yesterday reported a significant increase in remittance inflows, which peaked at $553 million in July 2024.

The all-time high performance represented 130 per cent increase from the corresponding period in 2023.

In a statement, CBN’s acting Director, Corporate Communications Department, Mrs. Hakama Sidi Ali, said the figure represented the highest monthly total inflows on record and reflected ongoing efforts by CBN to enhance liquidity in the country’s foreign exchange (FX) market.

The central bank attributed the substantial growth in remittance receipts to policy measures introduced by the bank to enhance liquidity in Nigeria’s foreign exchange market.

The measures included granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller model, and enabling timely access to naira liquidity for IMTOs.

Diaspora remittances were a crucial source of foreign exchange for Nigeria, supplementing both foreign direct investment and portfolio investments.

CBN’s initiatives supported continued growth in the inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.

The increase in remittances remained a strong testament to the success of the apex bank’s ongoing efforts to bolster public confidence in the foreign exchange market, strengthen a robust and inclusive banking system, and promote price stability, which is essential for sustained economic growth.

Recent data from the National Bureau of Statistics (NBS) revealed that Nigeria’s year-on-year headline inflation rate slowed in July 2024, for the first time in 19 months. Sidi Ali said this was a clear indication that CBN’s monetary policy tightening measures were delivering results.

CBN further anticipated that these measures will contribute to achievement of its broader objective of maintaining stability in the foreign exchange market.

The statement added that the central bank will continue to monitor market conditions and adjust policies as necessary to enable greater remittance flows into the country.

Analysts commended the progress so far achieved in the country’s foreign exchange market following recent reforms introduced by CBN Governor, Mr. Olayemi Cardoso.

Sources expressed optimism that if inflation continued to taper and FX flows sustained their rise, Cardoso might become the most consequential official in the administration of President Bola Tinubu.

Analysts also said the development will positively impact the economy going forward.

At the recent meeting of the Monetary Policy Committee (MPC), Cardoso explained that the various reform initiatives in the FX segment had been positive.

He said exchange rate had converged, limiting the opportunities for arbitrage.

He disclosed that that FX inflows had increased from 37.93 per cent between January and May 2024 to $38.8 billion, while net inflows grew by 73.4 per cent in May 2024 compared to May 2023.

The CBN governor also stated that diaspora remittances had currently gone up to $2.34 billion, compared to $1.58 billion in the corresponding period last year.

He said capital importation also increased to $5.92 billion between January and June compared to $1.77 billion same period last year.

Cardoso said, “So, that’s all very positive for foreign exchange management. We’ve also seen that on the capital markets policies, the capital market has been responding positively and, of course, the banking sector.

“We have been very aggressive in giving guidance to the banks with respect to how we want them to position themselves for the future of the $1 trillion economy.

“Inflation targeting is something that is an ongoing process, which we will be giving more and more guidance as we go along.”

He said the aim of monetary policy decisions was to impact the man on the street, and pointed out that the current economic hardship was a result of policy choices by past administrations