Money Changers Want a Piece of Diaspora Remittances Pie

By Bashir Olanrewaju

Money changers grouped under the Association of Bureaux des Change Operators of Nigeria (ABCON) have asked to be given a role in making payments to people receiving money from abroad.

This followed a recent directive by the Central Bank of Nigeria that beneficiaries of remittances from the diaspora be paid in hard currencies. The CBN had accused remittance operators of diverting their dollar receipts to the parallel market, undermining official exchange-rate policy.

With more than 5,000 members spread across the country, foreign-exchange bureaus will play the role of payout points effectively, helping boost liquidity and easing the pressure on the value of the naira, Aminu Gwadabe,  president of ABCON, said in a press statement.

Diaspora remittances peaked at almost $25 billion in 2018 and have become increasingly critical to Nigeria’s economy in the face of declining income from its main export, crude oil. Demand for oil was decimated by the coronavirus pandemic and the future looks uncertain with the challengeof green energy.

Prior to the CBN directive, banks and international money-transfer operator paid beneficiaries in naira, at the lowest of the multiple exchange rate system run by the government, thereby creating the temptation to roundtrip.

Diaspoea remittances through official channels fell more than 40 percent in the first half of this year as people increasingly sought alternative means of making transfers for the best possible rates.