The Central Bank of Nigeria (CBN) through a circular issued by its Director, Trade and Exchange Department, Dr. Ozoemena Nnaji has clarified that following different interpretations on the operationalisation of domiciliary accounts and to ensure the stability of the foreign exchange market, export proceeds domiciliary accounts would continue to be operated based on existing regulations, which allow its holders use of their funds for business operations only, with any extra funds sold in the Investors & Exporters’ (l&E) Window.
The circular also stated that for ordinary domiciliary accounts, where such accounts are funded by electronic/wire transfer, account holders would be allowed unfettered and unrestricted use of the funds for eligible transactions. However, it said where accounts are funded by cash lodgments existing regulation will continue to apply, explaining that the clarifications were necessary given the vastly improved capabilities of the CBN to monitor transactions, forestall money laundering and prevent the adverse effect of dollarisation in our economy.
“All authorised dealers and the general public are to note that Bank Verification Number (BVN) would be used to enforce compliance with these regulations. Please be guided accordingly,” it stated. The World Bank recently predicted that inflow of Diaspora remittance to Nigeria would drop by $2 billion in 2020 to $21.7 billion as against the $23.8 billion the country recorded in 2019.
The World Bank in a report had hinged the decline in remittances from Nigerians living abroad on account of the double whammy of the COVID-19 pandemic and the attendant economic crisis that has continued to spread. Globally, the bank had also anticipated that the amount of money migrant workers send home would decline by 14 per cent by 2021, compared to the pre-COVID-19 levels in 2019.
It stated: “Remittances are helping to address the impact on African households. Nigeria remains the largest recipient of remittances in the region and is the seventh largest recipient among LMICs, with projected remittances to decline to around $21.7 billion, a more than $2 billion drop compared with 2019.”
According to the report, remittance flows to low and middle-income countries (LMICs) are also projected to fall by seven per cent to $508 billion in 2020, followed by a further decline of 7.5 per cent, to $470 billion in 2021.
It had stated that the foremost factors driving the decline in remittances included weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.