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Customers Can Now Receive Dollars Direct from Diaspora – CBN

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Global remittances to decline sharply by about 20% in 2020 due to COVID-19

By Chibisi Ohakah, Abuja

Central Bank of Nigeria (CBN) has said that henceforth beneficiaries of Diaspora remittances through International Money Transfer Operators (IMTOs) can receive such inflows in foreign currency (US Dollars) through their banks.

On the other hand, the World Bank has said that it is working hard to keep remittance channels open and safeguard the poorest communities’ access to Diaspora remittances, the instrument being an agent foe poverty alleviation in lower- and middle-income countries,

World Bank said it is assisting member states in monitoring the flow of remittances through various channels, the costs and convenience of sending money, and regulations to protect financial integrity that affect remittance flows.

The apex bank said this directive is in order to liberalize, simplify and improve the receipt and administration of Diaspora remittances into Nigeria.

CBN said such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.

“These changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of Diaspora Remittances into Nigeria.

In addition, these changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that recipients of remittances would receive a market-reflective exchange rate for their inflows,” the apex bank said in a circular

CBN said all authorized dealers and the general public should note that beneficiaries shall have unfettered access and utilization to such foreign currency proceeds, either in cash and/or in their Domiciliary Accounts, in line with the circular TED/FEM/FPC/GEN/01/010, issued by the bank

The World Bank said that global remittances are projected to decline sharply by about 20% in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown.

It said that the projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country.

Remittances to low and middle-income countries (LMICs) are projected to fall by 19.7 % to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households, the World Bank said

Studies show that remittances alleviate poverty in lower- and middle-income countries, improve nutritional outcomes, are associated with higher spending on education, and reduce child labor in disadvantaged households. A fall in remittances affect families’ ability to spend on these areas as more of their finances will be directed to solve food shortages and immediate livelihoods needs.

“Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies,” said World Bank Group President, David Malpass.

He pointed out that remittances help families afford food, healthcare, and basic needs. “As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs,” he said

According to him, the World Bank is assisting member states in monitoring the flow of remittances through various channels, the costs and convenience of sending money, and regulations to protect financial integrity that affect remittance flows.

“It is working with the G20 countries and the global community to reduce remittance costs and improve financial inclusion for the poor,” the World Bank President said

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