CBN strengthens diaspora ties to boost Nigeria’s remittances

The Central Bank of Nigeria (CBN) has led a combined team of the Nigeria Inter-Bank Settlement System (NIBSS), major banking institutions and International Money Transfer Operators (IMTOs) to engage with the Nigerian Diaspora community in Houston, Texas, United States of America, in a strategic move to harness the economic potential of citizens living abroad.

Speaking at the forum with the theme, ‘Optimising Remittances to Nigeria: A Vision for the Future,’ Muhammad Sani Abdullahi, CBN deputy governor in charge of Economic Policy, told the gathering of critical stakeholders in the remittance ecosystem that the aim was to engage with the Nigerian diaspora community on opportunities to enhance remittance flows and strengthen the nation’s financial sector.

Reiterating Governor Olayemi Cardoso’s commitment to double the volume of capital inflows and diaspora remittances to Nigeria, Abdullahi emphasised the CBN’s commitment to “strengthening macroeconomic fundamentals to create an enabling environment where the private sector can thrive and generate quality jobs for Nigerians.”

He said the event was part of a series of engagements which the CBN would be holding in the coming months as it prioritises strategies to leverage diaspora remittances as a catalyst for inclusive economic growth, financial inclusion, and overall national development.

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Remittances have been a significant source of financial inflows for Nigeria, averaging $20.5 billion annually over the past decade, according to the World Bank.

However, much of these funds are directed towards immediate consumption rather than long-term investments that could drive economic growth.

Also speaking at the forum, Philip Ikeazor, deputy governor, Financial Systems Stability at the CBN, reiterated the forum’s call to shift the perception of remittances from a source of consumption to a tool for investment.

He emphasised that remittances could play a transformative role in Nigeria’s development if channelled effectively into productive investments.

In his remarks, Oliver Alawuba, group managing director/CEO of United Bank for Africa (UBA) and chairman of the Body of Banks’ CEOs in Nigeria, stressed the need for collaboration among banks, regulators, fintechs, and the broader ecosystem, noting that no single institution can unlock the total value of remittances.

Nneka Onyeali-Ikpe, CEO of Fidelity Bank, addressed the challenges facing diaspora members in sending money home efficiently, highlighting high costs and limited access to financial services.

Bunmi Akinyemiju, Venture Garden Group’s chief executive officer, who equally spoke, noted that stronger collaboration between banks and fintechs could reduce costs and improve access to remittances.

Yemisi Edun, CEO of First City Monument Bank, stressed the importance of trust in the remittance system. “One of the things we’re focusing on is a robust KYC system to instil confidence. We believe trust is not something we can build alone, so we are partnering with IMTOs and fintechs.”

Adobi Nwapa, executive director of Zenith Bank, also commented on the need for greater concessions for diaspora customers: “We’ve made it so simple. We’ve been doing a lot of concessions to the diaspora because we value their remittances.”

Expressing concern over Nigeria’s inclusion on the Financial Action Task Force (FATF) grey list, Olalere Ridwan, the CEO of LemFi, noted that reducing Nigeria’s risk status could significantly lower these fees and make remittances more affordable for the diaspora.