When Central Bank Governor Godwin Emefiele announced a new policy initiative intended to facilitate easier and faster remittance of money by Nigerians in the Diaspora, he looked so self-assured that the new rule would be implemented flawlessly, forcefully, and promptly. He was wrong.
His optimism was based on false premises. He did not accommodate the disingenuous “Nigerian factor”, the possibility that his planned project could be sabotaged, disrupted, or wrecked deliberately by criminals operating in financial institutions, and those working as International Money Transfer Operators (IMTOs). The new policy is already broken even before it has gained full steam.
The new CBN policy on remittances is unambiguous. According to Emefiele: “Beneficiaries of Diaspora remittances through IMTOs shall henceforth receive such inflows in foreign currency, in this case US dollars through designated banks of their choice. Such recipients in Nigeria of these remittances may have the option of receiving these funds in foreign currency cash or into their domiciliary account.”
Unfortunately, the policy has been overshadowed by many problems that have complicated the process. It has had adverse impact on Nigerians in the Diaspora who send money, including families and relatives who receive the money.
During his broadcast on 3 December 2020, Emefiele said the measures outlined in the country’s remittance program were intended to enhance and enable efficient flow of remittances made by Nigerians in the Diaspora.
On paper, the CBN may have unassailable reasons for introducing a policy designed to “boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient flow of remittances back into Nigeria”.
Despite its good intentions, the CBN must be held blameworthy for introducing in a hurry a policy that was meant to empower Nigerians in the Diaspora and boost flows of foreign exchange into the country. Yet the policy was rolled out mechanically, unsystematically, and in authoritarian style without consultations with Nigerians across continents to seek their views on the likely consequences of the policy and how it might affect them adversely.
The CBN policy on remittances is fundamentally flawed. It is mindless, upsetting, deeply baseless and biased because it is being implemented without due consideration for the circumstances of Nigerians in the Diaspora who regularly remit money to their families and relatives in Nigeria.
There are so many issues the CBN did not consider before rolling out the bizarre policy. Number one on the list is the personal security of recipients of the remittances. Sending money may not be difficult for Nigerians in the Diaspora. What is beyond their control is what happens to their family members and relatives after they have received the United States dollar. In any case, how could elderly men and women in villages, as well as young people who are not familiar with banking or foreign exchange system, successfully navigate the new hurdles placed by the CBN, the commercial banks, and the IMTOs?
As everyone knows, the US dollar is a golden magnet in Nigeria. Once someone is seen to be receiving US dollars from relatives residing overseas, they immediately become soft targets for kidnapping or assassination by armed robbers and other criminal groups, This is how an act of kindness by Nigerians in the Diaspora could turn into a disaster for their relatives in Nigeria.
The second problem of restricting remittances to US dollars involves the hassles and inconveniences that recipients could suffer. Just last week, some recipients were given the run around by crooked bank officials who either refused to acknowledge receiving the remittance or put up deliberate barriers to make it difficult for recipients to access their money.
In one case in Anambra State, a bank directed a recipient to travel to another branch as officials claimed they did not hold dollar in that branch. On getting to the branch, the recipient was directed to a bureau de change as officials in the branch again claimed they didn’t have dollars to pay out to the recipient. This is bizarre, objectionable, intolerable, and against the spirit and letters of the CBN policy.
These few experiences provide disturbing insights into what recipients of remittances go through in Nigeria following the new CBN policy. There are far more emerging ugly incidents than what I have narrated here.
While the CBN might have good intentions, it should not bother rolling out a policy it could not supervise effectively to make it work. This is the problem with the new policy. It is easy for the CBN to make policies but extremely difficult for the apex bank to oversee effective implementation of the policies. The new policy on remittances has already been bogged down at the level of execution.
At another level, the IMTOs have had to significantly increase their service fees in order to cover the loss which the new CBN policy created for them. Nigerians in the Diaspora who patronise the IMTOs are now compelled to pay higher than normal fees they did not pay previously when they remitted money to their relatives and families in Nigeria.
Rather than encourage Nigerians in the Diaspora to engage in enhanced transactions relating to money remittances to their home country, the CBN policy has discouraged that business. Since that policy came into force on 4 December 2020, the number of Nigerians remitting money to their family members and relatives has shrunk significantly. No one in their right senses would knowingly throw their relatives into the deep end of bureaucratic nightmares and security risks when trying to access money sent to them.
Sadly, the framework for implementing the CBN policy remains untested, clearly illusory, deceptive, or severely flawed. It is true the CBN aims to encourage greater transparency, better security in foreign currency remittances, and a reduction in fraudulent activities. However, the CBN rushed the new policy without examining methodically the logistical, technical, administrative, cultural, and religious problems that could undermine the policy.
Additionally, there was little or no evidence to suggest that the CBN undertook comprehensive market surveys to identify specific obstacles that could hinder seamless implementation of the policy and to explore ways to mitigate any possible difficulties.
One question that must be dealt with is: How do Nigerians in the Diaspora continue to remit money to their families and relatives in Nigeria with minimum hassles, fewer obstacles, and with lower threshold of risks to their lives? Experiences by recipients of remittances in the last week show that the banks are making things difficult for everyone. This is just one of the “Nigerian factors” that was alluded to earlier.
This new policy on remittances has portrayed the CBN as an insensitive, pig-headed, thoughtless, inflexible Leviathan incapable of listening, reasoning, and engaging thoughtfully with citizens in the Diaspora. Owing to the complications brought by the new policy, many families are now facing the possibility of going hungry during Christmas and New Year celebrations as their family members in the Diaspora may not be able to remit foreign currencies to them.
The idea that the CBN would introduce a policy in a haste to overturn an existing system through which foreign currency remittances were made by Nigerians in the Diaspora is baffling. The policy should not have been introduced without a sustained period of pre-testing that could reveal some of the likely hiccups that could disrupt implementation of the new rule.