IMTO inflows increased by 63.7% in first 9 months of 2024 – CBN

• The Central Bank of Nigeria says remittance inflows increased by 63.7 per cent in the first nine months of 2024
• The CBN said inflows increased from $2.33 billion during the same period in 2023 to $3.82 billion in 2024
• The increase is attributed to the reforms introduced by the Olayemi Cardoso-led CBN

The Central Bank of Nigeria (CBN) has stated that International Money Transfer Operator (IMTO) inflows increased by 63.7 per cent in the first nine months of 2024.

According to the latest quarterly statistical bulletin of the CBN, IMTO inflows rose from $2.33 billion during the same period in 2023 to $3.82 billion in 2024.

The increase in IMTO inflows has been largely attributed to a series of targeted reforms introduced by the Olayemi Cardoso-led CBN.

Year-on-year analysis of IMTO inflows

An analysis of the data shows consistent increases in monthly remittance inflows in the first nine months of 2024.

Remittance inflows increased by 32.4 per cent from $295.21 million in 2023 to $390.86 million in January 2024. In February 2024, inflows increased by 67.4 per cent from $195.23 million in 2023 to $326.91 million.

Inflows increased by 30 per cent from $279.79 million in 2023 to $363.76 million in March 2024. April 2024 recorded a significant 83.3 per cent increase from $254.26 million in 2023 to $466.11 million.

There was a 45.3 per cent increase in inflows to $404.75 million in May 2024. In June 2024, inflows increased by 40.2 per cent to $389.79 million.

July 2024 saw over 100 per cent increase in inflows from $240.35 million in 2023 to $552.21 million. The trend was sustained in August 2024 as the month recorded a 115.8 per cent increase from $271.24 million in 2023 to $585.21 million.

In September 2024, inflows rose by 40.9 per cent from $238.98 million in 2023 to $336.61 million, capping remittance inflows in the first nine months of 2024.

Month-on-month analysis of inflows in 2024

A month-on-month analysis of the data on remittance inflows in the first nine months of 2024 shows fluctuations with a generally upward trend.

Inflows in 2024 started on a strong note in January at $390.86 million before it declined by 16.4 per cent in February to $326.91 million.

In March, inflows increased by 11.3 per cent to $363.76 million. The trend was sustained in April as inflows increased by 28.1 per cent to $466.11 million.

The figures slightly declined by 8.3 per cent in May to $404.75 million, but increased by 7.8 per cent to $389.79 million in June.

July recorded a significant month-on-month increase of 41.8 per cent to $552.94 million. The highest monthly inflow recorded in the nine months was in August with a 5.8 per cent increase to $585.21 million.

In September, inflows declined by 42.5 per cent to $336.61 million compared to August’s $585.21 million, capping monthly remittance inflows for the first nine months of 2024.

CBN reforms to increase remittance inflows

Since his appointment in September 2023, CBN governor, Olayemi Cardoso, has rolled out reforms aimed at boosting foreign exchange liquidity and enhancing remittance inflows through formal channels.

To allow for flexible currency quoting and to address suspected cases of FX speculations and hoarding, the CBN, in January, removed the exchange rate caps quoted by IMTOs.

The policy required IMTOs to quote rates within an allowable limit of -2.5 per cent to +2.5 per cent around the previous day’s closing rate of the Nigerian FX market.

This was followed by revised operational guidelines that required IMTOs to have a minimum operational capital of $1 million for foreign companies and the naira equivalent for those operating within the country. The previous requirement was N50 million and N2 billion for foreign and Nigerian IMTPs, respectively. The guideline also stipulated an increase in licence application fees of IMTOs from N500,000 to N10 million. These were aimed at strengthening the sector’s operational and financial capacities

The CBN had also told banks and IMTOs to halt dollar payments of inbound transfers to customers in Nigeria. 

In a revised guideline to IMTOs and banks on January 31, the CBN said all inbound money transfers to Nigeria will be paid only in naira through a bank account or in cash at the prevailing rate in the Nigerian FX market.

It added that transfers above the naira equivalent of $200 must be accredited to the recipient’s account number while Naira cash payment equivalent for amounts below $200 will require an acceptable means of identification such as an international passport, driver’s licence, national identity card, and INEC Permanent Voters Card.

The guideline also prohibited banks and fintechs from operating IMTO services but can act as agents.

In May 2024, the CBN granted an approval-in-principle (AIP) to 14 IMTOs to improve foreign currency remittance through formal channels, a target that Cardoso said is achievable within a year.

On June 24, the apex bank also granted IMTOs access to naira directly from the CBN window or through Authorised Dealer Banks (ADBs) to settle transactions for the sale of foreign exchange (FX) in the market.

It said the measure is part of its commitment to enhancing local currency liquidity, ensuring the smooth functioning of the FX markets, improving formal remittance channels, and “widening access to local currency liquidity for the settlement of Diaspora remittances.”

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.