The Central Bank of Nigeria (CBN) has reported a significant 39% increase in inflows through International Money Transfer Operators (IMTOs) for the first quarter of 2024 compared to the same period in 2023.
This data, drawn from the CBN’s quarterly statistical bulletin for Q1 2024, highlights the success of recent reforms aimed at boosting dollar supply through IMTOs.
Breakdown of the Data
– January 2024: Inflows reached $383.04 million, up 30% from $295.21 million in January 2023.
– February 2024: Inflows surged to $322.83 million, a 65% increase from $195.23 million in February 2023.
– March 2024: Inflows were $363.70 million, marking a 30% rise from $279.79 million in March 2023.
– Q1 2024 Total: Inflows amounted to $1.07 billion, compared to $770.23 million in Q1 2023, reflecting a 39% increase.
– Q4 2023 Comparison: There was an 11% increase from $965.82 million in Q4 2023 to $1.07 billion in Q1 2024.
Reforms Driving the Increase
In January 2024, the CBN issued a circular removing the cap on exchange rates quoted by IMTOs. Previously, IMTOs had to quote rates within a -2.5% to +2.5% range around the previous day’s closing rate of the Nigerian Foreign Exchange Market. This reform aimed to attract more dollar inflows.
Further changes included revised guidelines for IMTO operations. The application fee for an IMTO licence was increased from N500,000 in 2014 to N10 million, a 1,900% rise over ten years. The CBN also set a minimum operating capital requirement of $1 million for both foreign and local IMTOs and lifted a ban preventing IMTOs from purchasing foreign exchange from the domestic market.
The CBN formed a Collaborative Task Force with IMTOs to double remittance inflows into Nigeria. This task force reports directly to Yemi Cardoso, the Governor of the CBN. Additionally, the CBN granted 14 new Approval-in-Principle (AIP) licences to IMTOs, according to Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali.
Economic Impact
The surge in remittance inflows is vital for Nigeria’s economy, providing essential foreign exchange and supporting household income. The CBN’s reforms, including streamlining processes, onboarding more IMTOs, and enhancing measures to increase foreign currency supply, have evidently been successful.
