An economist, Dr Alarudeen Aminu, has raised concerns over the Central Bank of Nigeria (CBN) directive mandating naira-only payouts for diaspora remittances, warning it could deepen imbalances in the foreign exchange market.
Aminu, an Associate Professor at the University of Ibadan and Chairman of the Nigerian Economic Society (Oyo State chapter), said the policy may have unintended consequences despite its intended benefits.
He explained that while the move appears aimed at preserving Nigeria’s foreign exchange reserves and stabilising the official market, it could distort the broader forex ecosystem if maintained for an extended period.
According to him, restricting access to dollar cash remittances may reduce foreign currency supply in the parallel market, potentially driving up exchange rate disparities.
Aminu noted that such a development could widen the gap between official and black-market rates, creating new challenges for the economy.
He also warned that the policy might open avenues for arbitrage, where individuals with access to official forex could exploit price differences by reselling at higher rates in the parallel market.
This, he said, could lead to inefficient allocation of foreign exchange and negatively impact businesses and households
The economist further explained that companies might begin to price goods and services based on higher parallel market rates, even when they obtain forex at official rates, thereby worsening inflationary pressures
However, Aminu expressed optimism that the measure may be temporary, possibly linked to global economic uncertainties such as the ongoing Middle-East crisis.
He cautioned that a prolonged implementation could reverse recent progress made in narrowing exchange rate disparities in Nigeria.
The policy follows a recent circular issued by the CBN to International Money Transfer Operators (IMTOs) and authorised banks, directing that all remittance inflows and settlements be processed in naira.
The apex bank said the move is intended to improve efficiency in the forex market and encourage greater inflow of diaspora remittances.
