Upheaval looms in Nigerian remittances sector

In recent times, the remittance industry has been facing significant changes in response to new guidelines set by the Central Bank of Nigeria. A significant minority of providers in the UK have temporarily suspended remittances to Nigeria, causing concern among those who rely on these funds.

One of the noticeable changes is the removal of the ability to pay directly into bank accounts. Many providers now offer only cash pickup as an option. However, there is confusion within the industry regarding whether direct-to-bank-account NGN pay-outs are permitted.

The decision to ban NGN exchanges of remittances, effective from December 7, and to allow only payments in USD cash or directly to a local bank account was taken by the relevant Nigerian financial regulatory authorities. The specific body or official who made this decision is not clearly identified. The Central Bank of Nigeria argues that the decision was needed to increase the depth and transparency of the foreign exchange market.

The remittance industry is making efforts to keep customers informed about the changes. Nevertheless, the uncertainty surrounding these changes has led to additional charges or FX conversions for recipients. Some local commentators claim that the decision is forcing customers into unofficial remittance channels with high margins or into converting USD locally at exchange rates not reflective of the market.

As of Monday 7 December, over half of providers were still showing NGN FX rates for remittances sent from the UK and US. In the following days, many providers switched to show only pay-out options in USD. The remittance industry faces challenges in maintaining transparency and keeping customers informed due to these ongoing changes.

It is important to note that the specifics of the topic that was not publicly discussed in the remittance industry are unknown. The article does not provide any new information about the impact of the changes on unofficial remittance channels or local exchange rates in Nigeria. Additionally, the article does not provide any new information about FX pricing variations to Nigeria or 100+ other countries, nor about the impact of the changes on the foreign exchange market in Nigeria.

The remittance industry is reacting to these changes, adapting to the new landscape and working to ensure that funds continue to flow to those who need them. The ongoing discussion within the industry underscores the complexities of navigating regulatory changes and the importance of clear communication with customers during these times.