Beginning from today, the new policy of Central Bank of Nigeria’s (CBN) that allows unfettered access to Diaspora remittances kicks off. In other words, the practice when recipients of foreign currencies had to be paid Naira equivalent has stopped. Beneficiaries will now be paid in the currencies sent to them from abroad.
Godwin Emefiele, the CBN Governor told journalists yesterday in Abuja: “I seize this opportunity to announce to Nigerians both at home and in the Diaspora that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020.
“All the IT systems of these IMTOs (Western Union, MoneyGram and Ria Services) and the DMBs have been properly configured to begin remittance tomorrow, Friday, December 4, 2020.”
He added: “This was the reason the CBN had to insist on Wednesday, December 2, 2020, that all DMBs must close all naira general ledgers through which the naira remittances were hitherto being carried out.
“Based on this premise, we analysed data on IMTO inflows into the country over the past year, and through our investigations, discovered that some IMTOs, rather than compete on improving transaction volumes and create more efficient ways for Nigerians in the Diaspora to remit funds, resorted to engaging in arbitrage arrangements on the naira-dollar exchange rate, which to a large extent resulted in a significant drop in inflows into the country.
“It also encouraged the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria, thereby undermining our foreign exchange management framework.”
“As a matter of fact, from the data that we have, the way the size of remittance is computed by the International Monetary Fund (IMF) takes into consideration, not just the money that comes in directly as flows but also what we call the earnings of Nigerians in Diaspora in different parts of the world – because they believe and we believe as well that some portion of these monies actually flow back home to support members of their families.
“But it is important for me to draw a parallel. I am aware from data available that for instance, Pakistan even in the midst of COVID-19 receives $2 billion monthly from Pakistanis in Diaspora. This is a country that I will say by geography, demography is about the same with Nigeria.
“So we are hereby saying that if Nigeria is even able to receive even if it’s just $1 billion monthly or $2 billion monthly, I am so damn certain that you all know what will happen to the exchange rate of Nigeria.”
“I want you to know that even from abroad, where these funds are coming, that is why we talk about institutions that are tested like Western Union, Ria and MoneyGram, which also in those countries where they are domiciled are properly licensed and regulated and I know for certain that countries, where they are domiciled, would not allow money laundering practices or remittance of funds from those countries into our country to be associated with money laundering.”
How Falana Fought and Won the Battle
On 21 October 2019, Mr Femi Falana, Senior Advocate of Nigeria fired a letter to Ibrahim Magu one time acting chairman of the Economic and Financial Crimes Commission (EFCC). Request: Falana wanted EFCC to investigate banks, Western Union and MoneyGram for “substituting naira for dollar remittances.”
Falana quoted what Boss Mustapha, the Secretary to the Government of the Federation said at the 2019 National Diaspora Day celebration in July 2019. The SGF revealed then that the remittances “received from Nigerians stood at $19.6 billion, $22 billion and $25 billion in 2016, 2017 and 2018,” in that order.
Falana argued that it was “a contravention of the Foreign Exchange Act and the Money Laundering Act that the CBN granted banks, Western Union and MoneyGram the authority to pay beneficiaries of remittances in naira while retaining the dollar.”
Falana, in addition, wrote to the CBN on 10 February 2020, demanding to know the accurate remittances for 2016, 2017 and 2018 respectively. This was necessary because the CBN itself gave Nigerians wrong figures, thereby reducing the exact amount Nigerians abroad remitted home. For instance, in February 2019, the Nigerian government disclosed that the remittances received in the country in 2016, 2017 and 2018 were $19.6bn, $22bn and $25bn respectively.
However, the management of the Central Bank of Nigeria, as Saharareporters put it, faulted the figures, “going ahead to claim before the House of Representatives’ Committee on Diaspora that contrary to the World Bank’s report, the official financial inflow was $2.6bn for 2018.”
Falan wrote to CBN: “At the 2019 National Diaspora Day held at Abuja in July 2019, the Secretary to the Government of the Federation, Boss Mustapha, revealed that the remittances received by Nigeria stood at $19.6bn, $22bn and $25bn in 2016, 2017 and 2018.
“According to Mr Mustapha, the money is currently utilised as social security funds to families (school fees, feeding allowances, hospital bills and so on). Some of it is invested in housing and estate development, hospital projects, schools and commercial enterprises but are not properly documented and analysed for impact.
“Springing from the above statement from the Secretary to the Government of the Federation, we request to be furnished with the official figures of remittances received by Nigeria from the Diaspora for 2016, 2017 and 2018. Please be informed that this request is anchored on the Freedom of Information Act, 2010.”
On 29 June, 2020, C.E Olonta of CBN responded that the information sought was already on its website, as such it could not supply more.
Not a man to relent, Falana made a beeline for the Federal High Court, Abuja, to file a suit dated 28 July, 2020.
According to the suit: “The failure of the Respondent to furnish the Applicant with the details of her request is unlawful and in contravention of the provision of the Freedom of Information Act.
“That the information requested by the Applicant was never published by the Respondent on its websites claimed in the letter dated 29th June 2020.
“That a prerogative writ of mandamus can be issued or ordered by the court to secure or compel the Respondent to furnish the Applicant with the official figures of Diaspora remittances received by Nigeria for the years: 2016, 2017, and 2018 respectively under Section 20 of the Freedom of Information Act 2010.”
