The Central Bank of Nigeria has extended its Naira 4 Dollar Scheme, “until further notice,” the regulator said.
The scheme was scheduled to end on May 8, but in a circular titled “Re: Introduction of the CBN’s “Naira 4 Dollar Scheme for Diaspora Remittances,” CBN simply announced the extension of the scheme, without stating when it will terminate.
“Further to the CBN Circular referenced TED/FEM/PUB/FPC/01/003 dated 05 March 2021 on the above subject matter, which was originally scheduled to end on May 8, 2021, we hereby announce the continuation of the scheme until further notice,” CBN said in the circular dated May 5, 2021, and signed by Director, Trade and Exchange Department, Saleh Jibrin.
All aspects of the operationalization of the program remain the same, the circular added.
CBN introduced the scheme as a means of attracting higher inflows of diaspora remittances into the country, using the Naira 4 Dollar Scheme as an incentive for senders and recipients of International Money Transfers.
The circular announcing the commencement of the scheme had said that: “The CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every $1 remitted by the sender and collected by designated beneficiary”.
“This incentive is to be paid to recipients whether they choose to collect the dollar as cash across the counter in a bank or transfer same into their domiciliary account. “In effect, a typical recipient of diaspora remittances, will, at the point of collection, receive not only the dollar sent from abroad but also the additional N5 per dollar received,” it explained.
Some economists had observed however that the scheme meant an implicit devaluation of the naira, given that the recipient of the dollar also gets an extra five naira in addition to the dollar sent.
