The Central Bank of Nigeria (CBN) recently took to its website to announce the introduction of the CBN’s “Naira 4 Dollar Scheme” for Diaspora Remittances — a N5 for every 1 dollar incentive to encourage Nigerians living abroad to send money through legal channels.
The promo is expected to run for 3 months, beginning from Monday 8 March 2021 and ends on Saturday 08 May 2021.
However, it seems Nigeria is not the first to introduce incentives for its citizens living outside the country, Bangladesh and Pakistan both took the same decision in 2019 and 2020 respectively.
In Pakistan, for every US$2500 to US$ 50,000 sent to the country per annum through official banking channels, Pakistanis living aboard are entitled to foreign exchange remittance card that gives free issuance and renewal of passport on urgent basis privileges.
Other privileges attached to the card includes separate counters for special handling at arrival and departure lounges at all International Airports in Pakistan, a duty credit- that can be utilized for seven items with fixed duty i.e., television, deep freezer, refrigerator, microwave oven, cooking range, washing machine and air conditioner.
Since the introduction of these incentives, remittances in Pakistan have been at an all-time high level in years.
In 2018, the country received $20 billion in remittances which was considered the highest at that time. Following the various incentives introduced in 2020, the country recorded a 40 percent growth to $28 billion despite the pandemic.
In World Bank’s latest migration brief, Pakistan growth in diaspora remittance was attributed to various incentives the government of Pakistan introduced.
Bangladesh, another country wooing its citizens living aboard to send money through normal channels also witnessed diaspora remittances surge.
The South Asian country offers its citizens a 2% cash incentive for transfers of up to $1500 remitted by its citizens in the diaspora since 2019. An incentive similar to the recently introduced CBN Naira 4 Dollar Scheme.
Although there is a clause for higher values, beneficiaries will need to show the remitter’s passport, an appointment letter from the employer, and a certification from the Bureau of Manpower, Employment, and Training (BMET). Where a businesspersons remitting amounts exceed USD 1500, their beneficiaries need to produce a copy of the business license.
Similar to the success recorded by Pakistan, Bangladesh in 2020 saw its Diaspora remittance rise by 45.03 percent to $21.9 billion from $15 Billion in 2019.
This beat the World Bank’s forecast that remittance inflows to Bangladesh may plunge as much as 22 per cent in 2020 to about $14 billion due to the pandemic.
Compared to Nigeria that saw its diaspora remittance falling by 71percent to $5.51 billion compared to $19.16 billion sent back home in 2019 according to data from Central Bank of Nigeria, time will tell how much of this initiative will do in helping the country record remittance through legal channels and help plug the difference between official exchange rate and black market which currently stands at N69.
On Friday, Naira exchanged at N411/$1 in the official exchange market, while it exchanged at the black market at N480/$1.