The Central Bank of Nigeria (CBN) has introduced the CBN “Naira 4 Dollar Scheme” as an incentive for senders and recipients of international money transfers.1 More specifically, all recipients of diaspora remittances through CBN licensed International Money Transfers Operators (IMOs) will be paid N5 per $1 received as remittance inflows in addition to the USD sent from abroad. This will however last from March 6, 2021 to May 8, 2021. The Naira 4 Dollar Scheme is being put in place to incentivize foreign exchange inflows into the country and increase foreign reserves. The scheme is likely to deter the CBN from further devaluing the currency following improved foreign exchange inflows. However, the effect of the scheme on Nigeria’s balance of payment account should be seriously considered in order not to push the country into further deficit.
March 24, 2021
Nigeria Economic Update (Issue 10)
Related
Nigeria Economic Update (Issue 14)
The
considerable increase in inflation continued to be driven by
exchange-rate-pass-through from imported items as well as the lingering
scarcity in the availability of Premium Motor Spirit (PMS). One of the key ways
to reduce inflationary pressures in the near term is to improve the supply of
PMS to filling stations. In the medium to long term, the Nigerian National
Petroleum Corporation (NNPC) may need to revitalize local refining and bridge
the gap between the supply and demand for PMS by households and businesses.