March 24, 2021

Nigeria Economic Update (Issue 10)

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.

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Nigeria Economic Update (Issue 11)

In the crude oil market, OPECs weekly basket price increased 1.07 percent from $29.02 per barrel in February 19 to $29.33 per barrel in February 26. A combination of factors were responsible for the slight price increase. First, a decrease in the number of active oil rigs in the US2 (the lowest since 2009) may have marginally eased the glut in the crude oil market. The ongoing efforts by OPEC and other major oil producers such as Russia to freeze oil production have also played a significant role in stemming the downward trend in oil prices. With the current market conditions, the price of crude oil is expected to maintain a fairly stable and modest upward trajectory in the near term.