Central Bank of Nigeria’s Naira4Dollar scheme may have attracted about $40m in foreign remittances in one week, according to a reliable source with knowledge of the scheme. The source informs Nairametrics that the scheme has performed a lot more than expected as remittances via commercial banks have picked up, suggesting Nigerians in diaspora have embraced it.

According to the source, CBN received circa $40m last week from remittances, up from about $6m before the policy was introduced. At $40m a week, CBN could be attracting about $160m a month or $1.9bn per annum. This will be higher than the estimated $1.1bn received in 2020 from diaspora remittances but much lower than the $3.2 billion received in 2019.

The central bank captures remittances in its Balance of Payment report and the ForEx Flows data. While the BOP includes non-cash items remitted into Nigeria, the ForEx Flows Data records cash items only. Nairametrics reported last week that commercial banks in Nigeria are automatically opening domiciliary bank accounts for beneficiaries of diaspora remittances in Nigeria under CBN’s Naira4Dollar scheme. As the beneficiary receives inflows, N5 for every dollar remitted is credited to the beneficiary's naira account.

WHAT THIS MEANS
The CBN Naira4Dollar scheme appears to be recording success since its introduction 3 weeks ago. A $40m a week inflow suggests most of the dollars are either in domiciliary accounts of customers or withdrawn and exchanged at the black market. CBN believes remittances paid in dollars and sold on the streets will improve liquidity in the retail end, thus strengthening the exchange rate.

However, the latest information suggests the exchange rate between the naira and dollar is N486/$1 higher than the N480/$1 exchanged just before the new policy was introduced. At $40 million the CBN would have incurred a cost of about N200 million. Diaspora remittances are down 61% YoY highlighting need for CBN's Naira4Dollar promo

SOURCE (abridged): https://nairametrics.com/2021/03/24/naira-4-dollar-diaspora-remits-40-million-in-one-week/

But I bought 1USD for 500 naira Friday. Where is nairametrics getting this fake information of NGN486/USD from?