The Central Bank of Nigeria, CBN, has issued a warning to Nigerians, home and abroad, who occasionally indulge in money transfer either in or outside the country to watch out for Money Transfer Operators who are not licensed or whose licence has been revoked.
CBN had suddenly clamp down on money transfer operators, effectively blocking many outlets used by citizens to send money in and out of Nigeria.
The warning issued on Tuesday pointed out the unwholesome activities of some unlicensed International Money Transfer Operators who defy Nigeria’s policy on money exchange. It was clearly stated and it reads:
“For the greater economic benefit of Nigeria, the Central Bank will not condone any attempt aimed at undermining the country’s foreign exchange regime. All financial services providers in Nigeria, just as in other jurisdictions, are required to be duly licensed in order to protect both customers and the financial system as well as to ensure the credibility of financial transactions.
“For the avoidance of doubt, all licensed International Money Transfer Operators, are required to remit foreign currency to their respective agent banks in Nigeria for disbursement in naira to the beneficiaries. The foreign currency proceeds are to be sold to Bureaux De Change operators, for onward retail to end users.”
Following the shut down of many but three money transfer services, huge amount of money worth a total of about $20.8 billions remittance to Nigeria has been affected as confirmed by Global Knowledge Partnership on Migration and development.
The three money transfer services now licensed to operate in Nigeria are: Western Union, MoneyGram and Ria – companies that have physical operations on ground in Nigeria. Companies like WorldRemit, an online money transfer service that launched in 2011, has been affected by the edict.
Effects of this Sudden Decree on Money Transfer In Nigeria
According to CEO of WorldRemit, Ismail Ahmed, the edict is hugely detrimental to the Nigerian diaspora, who rely on hundreds of money transfer companies and banks who provides varieties of choices, convenience and competitive pricing.
During his interview with CNN, Ahmed said there were no clarity surrounding the change. He claimed that his company sends 40,000 money transfers to Nigeria each month and handles about $20 billion a year in remittances for various countries including Nigeria. Ahmed said:
“This is the first time in my 20 years of experience that a regulator is saying if you want to send money to Nigeria, you have to physically come to Nigeria and set up a company.
“On Monday evening, Nigeria simply shut down transfers. The banks told us they couldn’t process our transfers. The country was one of the most competitive markets until Monday. This is extreme. It’s going to be quite explosive among the Nigerian diaspora.”
OPINION: Considering the high rate of unemployment in Nigeria, this move aims to automatically draw many companies that benefits from Nigerians to establish their branches within the country, hence creating room for employments.