By Chinwendu Obienyi

For centuries, there have been heated debates over the sources of economic growth in
developing economies and why some countries reflect strong economic growth compared to

The hypotheses have often centred around crude oil, agriculture, revenues, private capital,
bubbling stock market, stable security, low unemployment rate, high standard of living amongst
others. But in recent times, one factor that has been added to this list is diaspora remittances as
it is one of the major international financial resources, which sometimes exceed the flows of
foreign direct investment (FDI).

Remittances promote economic growth by increasing household income and increasing income
creates the opportunity to boost consumer spending, accumulation of assets, promotion of self-
employment, and investment in small business.

Data from the World Bank in 2014 indicates that global remittances stood at $430 billion dollar
in 2011 and was 0.31 per cent of global GDP in 2009. The impact of remittances on any
economy is more profound in developing countries because they receive $307.1 billion of the
total N416 billion inward remittances, amounting to about 74 percent.

Remittances also account for about 27 percent of the GDP of developing countries. According
to the World Bank, remittances flows to the developing world have reached $414 billion in 2013
(up 6.3 per cent over 2012), and are now, behind foreign direct investment, the second largest
source of external financial flows to developing countries.

Daily Sun investigations reveal that the enormous upward movement in remittances payments
may be attributed largely to two factors, namely; immigration between developing and
developed countries which increased dramatically in the past 20 years and declined in

transaction costs as technological improvements have allowed for faster, lower cost
mechanisms for the international transfer of payments between individuals.

This means that it is different from other external capital inflows like foreign direct investment,
foreign loans and aids due to its stable nature. Little wonder why the Central Bank of Nigeria
(CBN) unveiled a new policy in 2020 that granted unfettered access to forex from the diaspora
and other money transfer remittances like Western Union and MoneyGram.

The bank also clarified transactions that are eligible under the policy in line with global best
practices. The policy allows beneficiaries of diaspora remittances through International Money
Transfer Operators (IMTOs) to henceforth receive such inflows in the original foreign currency
through designated bank of their choice. It explained that the new regulation was part of efforts
to liberalise, simplify and improve receipt and administration of diaspora remittances into

Under the new policy, recipients of remittances may have the option of receiving such funds in
foreign currency cash (US Dollars) or into their ordinary domiciliary account.

“These changes are necessary to deepen the foreign exchange market, provide more liquidity
and create more transparency in the administration of Diaspora remittances into Nigeria,” the
apex bank stated.

It explained that the changes would help finance a future stream of investment opportunities for
Nigerians in the Diaspora, while also guaranteeing that the recipients of remittances would
receive a market- reflective exchange rate for their inflows.

Backed by these words, several commercial banks swung into action to tap into this virgin zone
by introducing a variety of offers that yield fruits as more remittances started coming in.

However, the CBN in March 2021, in a bid to encourage more inflows, introduced a new
incentive tagged “Naira 4 Dollar Scheme”. In a circular signed by Saleh Jibrin, CBN ‘s Director,
Trade and Exchange Department, said, the scheme would allow all recipients of diaspora
remittances to be paid N5 for everyone dollar received.

This explains why First Bank of Nigeria Limited chose to expand diaspora remittances inflow
into the country by increasing its network of International Money Transfer Operators (IMTOs)
targeted at easing accessibility of its customers to receive money from close to 100 countries
across the world in a safe and secured manner.

Before then, it was on record that FirstBank has maintained a long-standing partnership with
Western Union, MoneyGram, Ria, Transfast, and WorldRemit. The Bank is also in partnership
with other IMTOs including Wari, Smallworld, Sendwave, Flutherwave, Funtech, Thunes and
Venture Garden Group to promote remittance inflows into the country, thus putting Nigerians
and residents at an advantage in receiving money from their families, friends and loved ones
across the bank’s 750 branches especially in this Yuletide season.

For potential customers without an existing domiciliary account, they can have their dollar
account automatically created for their remittances and can also receive inflow directly into their
account through Western Union.  In addition, FirstBank has launched its wholly owned
remittance platform named First Global Transfer product to promote the international transfer of
funds across its subsidiaries in sub-Saharan Africa. These subsidiaries include FBNBank DRC,
FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, and FBNBank

Reiterating the bank’s resolve in promoting diaspora remittances, regardless of where one is
across the globe, the Deputy Managing Director, Mr Gbenga Shobo said, “At First Bank,
expanding our network of International Money Transfer Operators is in recognition of the
significant roles diaspora remittances play in driving economic growth such as helping recipients
meet basic needs, fund cash and non-cash investments, finance education, foster new
businesses and debt servicing.

We are excited about these partnerships, as it is essential to ensure our customers are at an
advantage to receive money from their loved ones and business associates, anywhere they are
across the world.”

Having been at the forefront of pioneering international funds transfer and remittances over 25
years ago, it is safe to say the bank’s wealth of experience and operation in over 750 locations
nationwide gives it the edge in the market.

With its total principal standing at N100 billion and over one million customers to service in
2020, FirstBank is providing prospective investors wishing to explore the vast business
opportunities that are available in Nigeria, an internationally competitive world-class brand, a
credible financial partner, thus promoting economic growth and development.

Culled from The Sun

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