CBN Approves 14 New International Money Transfer Operators

The Central Bank of Nigeria (CBN) announced on Wednesday that it had granted approval-in-principle (AIP) to 14 new International Money Transfer Operators (IMTOs) to triple the amount of foreign currency remittance inflows through official channels.

The program, as stated, will encourage more competition and innovation among IMTOs to lower the cost of remittance transactions and increase financial inclusion, which will help increase the sustained supply of foreign exchange in the official market.

The Central Bank of Nigeria (CBN) thinks that raising official remittance flows, which account for over 6% of GDP and are one of the primary sources of foreign exchange, would help lessen the historical volatility in Nigeria's exchange rate caused by outside factors like changes in foreign investment and revenue from oil exports.

"This will spur liquidity in Nigeria's Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira," said Hakama Sidi Ali, CBN's Acting Director of Corporate Communications, while announcing the new plan in a statement.

The governor of the CBN, Olayemi Cardoso, revealed that the top bank aims to double remittance flows into Nigeria in a year, something he is confident can be accomplished.

"We are wasting no time driving progress to permanently remove any bottlenecks hindering flows through formal channels. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry," he had stated.

In Nigeria, companies or organisations known as IMTOs are those that the Central Bank of Nigeria (CBN) has authorised to help move foreign exchange funds from foreign-based individuals or entities to recipients back home in Nigeria.

The CBN raised the total number of IMTOs from 47 to 62 in 2023.

The primary goal of the CBN's remittance task force, which is subordinate to Governor Cardoso, is the expansion of IMTOs. This task force is a cooperative group that brings experts together to collaborate closely with market operators and the private sector to promote ease of business in Nigeria's remittance ecosystem.

The task force was formed in April due to an executive learning session with IMTOs held during the 2024 World Bank/IMF Spring Meetings in Washington, D.C.

To implement the plan and track how its actions affect remittance inflows, the task force will convene regularly.