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CBN optimistic of securing $12bn in diaspora remittances

Mr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, announced in Washington DC that the CBN is optimistic about receiving $1 billion in monthly remittances.

This confidence stems from the resolution of concerns raised by International Money Transfer Operators and positive feedback from Nigerians in the Diaspora.

Cardoso made the announcement during a joint press conference with the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, following the International Monetary Fund and World Bank Annual Meetings, according to Nigeriawatch.

The CBN governor noted that Nigeria's remittances increased from just over $250 million in April to more than $600 million by September. He emphasized the central bank's efforts to get Nigeria off the grey list.

Minister Edun also stated that the bold reforms implemented by President Bola Tinubu's administration are beginning to yield positive results.

"Nigeria has such a strong diaspora community here; in the early stages of the reforms, IMTOs were having difficulty transferring funds back to Nigeria, so we felt it was critical to engage them, which we did. As a result of that engagement, we identified specific problems for which a great deal of responsibility was shared. Things have since improved, as monthly inflows were around $250 million at the last meeting, which I believe was in April, but by September, they had risen to $600 million.

"With the recent announcement by Nigeria Interbank Settlement Systems (NIBBS) on Bank Verification Number (BVN), and other products that the banking industry is offering, and through engagement with the diaspora, we believe we will be able to move accordingly and again, rising from that engagement, we put our sights on increasing the inflows to $1 billion monthly and I'm confident that we will get there," he told journalists.

To boost investor confidence in the Nigerian economy, the CBN governor stated that the central bank is committed to removing Nigeria from the grey list, which includes countries that do not adequately address illicit financial flows.

Countries on this list face increased scrutiny from the Financial Action Task Force, which focusses on strengthening anti-money laundering and counter-terrorism efforts around the world.

Giving an overview of his accomplishments over the last year, the CBN governor stated, "In the last year, our focus has been on the exchange rate, improving financial system provision, fostering financial inclusion, and increasing transparency in our monetary policy decisions and communications.

"We implemented bold and necessary reforms to return to the path of monetary policy orthodoxy and eliminate observed distortions in the foreign exchange market. Our efforts have resulted in significant progress, as volatility in the foreign exchange market has subsided and remittances have increased significantly; we have increased transparency and improved overall supply in the foreign exchange market, resulting in reduced arbitrage and speculative activity and the elimination of front-loading of foreign exchange demand."

The CBN governor stated that the recapitalisation policy has encouraged deposit money banks to improve their financial positions, resulting in a more robust banking sector. He expressed optimism that this initiative will help to achieve a $1 trillion economy by 2030. He emphasized his commitment to addressing ongoing challenges and the value of a transparent market system.

He also emphasized the importance of increasing financial and economic inclusion, particularly for small businesses, households, women, and young people, through the use of innovative technologies and remote banking solutions.

"We intend to reduce transaction costs and increase financial access, ensuring that every Nigerian, regardless of location or demographic, can meaningfully participate in our evolving financial system while adhering to orthodox monetary policy. Let me reiterate our commitment to systematically pursuing this path in order to address all upcoming challenges. We appreciate the continued support of our key stakeholders, which include investors, banks, the Nigerian diaspora, and businesses. With our fiscal counterparts, we have strengthened collaboration over the last year by forming several joint committees. These committees are intended to generate actionable results by creating effective platforms for stakeholder engagement and delivering concrete solutions to better align monetary policy with fiscal operations. I am confident that with our combined efforts and long-term commitment, we can pave the way for a more prosperous Nigeria that promotes robust and inclusive growth," he said.

Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Edun, stated that President Tinubu's bold reforms were yielding the necessary results.

"It has been a very interesting week of high-level discussion about the global economy, its status, direction, and various policy restrictions. We all agree that there is a need to combat inflation; most of Europe is close to its target of 2%. Their economy is gradually recovering, and as a result, they are gradually easing their previously tight monetary positions.

"In advanced economies, as inflation falls, interest rates fall, which is good news for those who need to borrow money from the market. For us in emerging markets and developing economies, inflation remains relatively high, and the majority view at the moment is that interest rates must remain high.

"At the same time, debt levels have increased, and caution must be exercised, and growth is slow. So we try to keep inflation low, which must be addressed as a priority due to the negative impact it has on purchasing power. However, critical investments must continue to ensure growth because, at the end of the day, growth, job-creating growth, is what will lead to poverty reduction," he stated.

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