deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of diaspora remittances into Nigeria”.
The market’s preference for hawala-type money transfers partially reflects the cumbrous nature of the formal financial services system. The innumerable forms that have to be filled and procedures often feel designed more to check the boxes in banks’ anti-money laundering/combatting the financing of terrorism procedures than to ease customer access to their funds or improve the convenience of use of banks’ facilities.
“How effective will this policy be?” is a different question. The CBN estimates the inflow of remittances at US$24bn yearly. This, however, was pre-covid-19. With the dirty, dangerous and demeaning work which most immigrants used to do in the old normal first in line for the sundry disruptions that have come in the wake of the pandemic, it is a fair bet that the liquidity that the CBN expects from this policy pivot will be muted.