The recent reforms by the Central Bank of Nigeria (CBN) have garnered a positive response from the market, leading to several notable developments. Firstly, the Naira appreciated by 13.3 percent on the parallel market, closing at N1,350 to the Dollar, indicating growing confidence in the official FX market. Despite this positive movement, the Naira still exceeded the parallel market price, closing at N1,461.90/$ at the official Nigerian Autonomous Foreign Exchange (NAFEX), albeit with a marginal decline.
Deposit Money Banks (DMBs) have begun taking steps to comply with the CBN’s directive for swift repatriation of export proceeds into export domiciliary accounts. Guidelines stipulate that proceeds should be repatriated within 90 days of shipment, supported by relevant documentation.
Moreover, the CBN issued revised guidelines for International Money Transfer Services (IMTO) in Nigeria, setting stringent requirements for prospective operators, including a minimum share capital of $1 million and a non-refundable application fee of N10 million. These reforms aim to enhance transparency, boost diaspora remittances, and promote efficient market-determined exchange rates.
Under the new framework, IMTOs must adhere to Anti-Money Laundering (AML), Combating Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF) obligations. Additionally, banks are prohibited from operating IMTO services directly but can act as agents, while fintech companies are excluded from obtaining IMTO approval.
Overall, these reforms are designed to improve the ease of doing business for IMTOs, strengthen regulatory oversight, and facilitate transparent and efficient international money transfers.
