Nigeria extends incentive period to boost dollar remittances

Nigeria’s central bank will continue indefinitely an incentive program to boost dollar remittances into Africa’s largest economy.

The initiative, which rewards recipients with 5 naira for every $1 they receive through licensed international money transfer operators and commercial banks, was scheduled to end on May 8.

It was introduced to encourage recipients of dollars to use formal banking channels and help the central bank capture such inflows to boost the stability of the local currency, which has been under pressure after oil prices plunged last year.

“We hereby announce the continuation of the scheme until further notice,” the regulator said in a statement on its website on Thursday.

The naira has been devalued three times since last year after a sharp drop in oil earnings, which accounts for 90% of foreign-exchange inflows, and remittances from workers abroad led to a dollar crunch in the West African nation, which produces the most crude in Africa.

The local unit traded for 410.31 on the investors and exporters window, also called Nafex, as of 8:51 a.m. in Lagos.