- The Central Bank of Nigeria has introduced two accounts to allow diasporans to invest locally
- The CBN barred local deposits into the accounts so they serve their purpose
- The accounts offer several benefits and investment opportunities for Nigerians in the diaspora
The Central Bank of Nigeria (CBN) has introduced two new financial products, the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA), aimed at attracting investments from Nigerians living abroad.
The CBN said these accounts aim to streamline remittances, encourage investments, and foster financial inclusion among Nigerians in the diaspora.
This was announced in a circular released by the Trade and Exchange Department of the CBN on Friday, January 10.
The apex bank noted that the NRNOA is an account that enables non-resident Nigerians (NRNs) to remit their foreign earnings to Nigeria and manage funds in both foreign and local currencies, while the NRNIA enables Non-Resident Nigerians (NRNs) to invest in assets in Nigeria in either foreign currency or local currency
The circular, signed by the acting Director of Trade and Exchange, Dr W. J. Kanya, said effective January 1, 2025, eligible NRNs can open these accounts, subject to meeting Know Your Customer (KYC) requirements detailed in an upcoming Frequently Asked Questions (FAQs) release.
The circular read, “The Central Bank of Nigeria is pleased to inform the general public of the introduction of the Non-Resident Nigerian Ordinary Account and Non-Resident Nigerian Investment Account targeted at Nigerians in the diaspora.
“The NRNOA enables Non-Resident Nigerians (NRNs) to remit their foreign earnings to Nigeria and manage funds in both foreign and local currencies, while the NRNIA enables Non-Resident Nigerians (NRNs) to invest in assets in Nigeria in either foreign currency (FCY) or local currency (Naira).
“Account holders may maintain both a foreign currency (FCY) account and/or a local currency (Naira) account to facilitate transactions and participate in diverse investment opportunities.”
CBN bars local deposits
The apex bank also barred local deposits into the NRNIA and NRNOA to ensure the accounts serve their intended purpose of boosting remittances and investments from the diaspora.
It said, “Deposits into non-resident accounts must originate from external sources through approved channels.
“Local deposits are prohibited, except for traceable proceeds from approved local investments linked to prior foreign currency inflows and settlement of foreign exchange transactions i.e. sale of FCY balances to authorised dealers.
“Transfers to other local accounts within Nigeria are allowed only in Naira.”
Benefits of new accounts to diasporans
The CBN highlighted that the accounts will allow diasporans to have improved access to opportunities in the Nigerian economy and contribute to the socioeconomic development of Nigeria.
The apex bank added that interest earned on deposits will be subject to applicable federal taxes, and balances in the foreign account can be fully repatriated without restriction. It said funds can also be converted into naira at prevailing exchange rates through authorised dealers.
For the NRNIA, investment principal and profits can be fully repatriated, allowing account holders to invest in foreign currency-denominated assets such as bonds, fixed deposits, or local assets like equities, government securities, and mortgage products.
It said, “NRNs can use their NRNIA to participate in Nigeria’s Diaspora Bond and other debt instruments issued locally specifically targeted at the Nigerian diaspora or available to the investing public.
“The account will also serve as a conduit for NRNs to manage their funds directly in a safe and secure environment, and reduce the reliance on third parties in meeting local commitments and obligations.
“Effective 1st January 2025, eligible NRNs shall have the opportunity to own any of the Non-resident Nigerian accounts, subject to meeting KYC requirements which will be made available in FAQs to be released soon.”
Journey to optimising diaspora remittances
Recall that in October 2024, the CBN led a team to engage with the Nigerian Diaspora community in Houston, Texas, United States, to foster strategies that will enhance remittance flows and strengthen Nigeria’s financial sector.
Following the engagement, the CBN announced plans to unveil the Non-Resident Bank Verification Number (NRBVN) by December of 2024 to enable Nigerians living abroad to complete their KYC processes remotely.
This aimed to simplify access to banking services while adhering to the highest global practices on anti-money laundering.
With remittances accounting for a significant source of financial inflows for Nigeria, reaching $3.82 billion in the first nine months of 2024, the CBN and financial stakeholders want to explore how remittances can be better leveraged for national development and long-term investments, rather than immediate consumption only.
CBN says policies helped increase remittance inflows to $553m, slow down inflation in July
Meanwhile, TheRadar earlier reported that the Central Bank of Nigeria (CBN) said its policies are instrumental to the increase in remittance inflows to an all-time high of $553 million in July 2024 and the slow-down of headline inflation to 33.40 per cent in July.
The amount, a 130 per cent increase from the amount recorded in the corresponding period in 2023, represents the highest monthly total inflows on record.
