Experts Task CBN on Remittance Industry Regulations

Central Bank of Nigeria (CBN) has been urged to leverage the remittance industry to boost the country’s gross domestic product (GDP) by allowing a flexible regulations concerning “outbound remittance licencing” in the market.

Participants at the Mobile Money Expo 2016 held in Lagos during the week, were unanimous in their views that the formal market for international money transfer to Africa is still young and faces typical emerging market challenges when compared to more established market, thus, the CBN should be explicit on the processes of obtaining the licencing; as a one bold step to deepening financial inclusion in the country.

According to the remittance industry players, global economic outlook surpasses that most Nigerians abroad, especially students who are in dire need of financial help from parents and guidance at home will cherish using digital remittances as credible platforms to meet such needs.

Sudhesh Giriyan, chief operating officer of Xpress Money, said although higher remittance costs are the biggest hurdles in the industry, however, all-inclusive licencing regime would attract more players in the industry.

Giriyan said that African market with more convenient products can fetch the Continent additional $2.5 to $3billion yearly, but some regulations on remittance licencing (for outbound) need to provide straight-forward process.

Jerry Ejikeme said that available statistics points at Nigeria as the largest receiver of remittances in Sub-Saharan Africa, accounting for over $34billion in 2015.

He however, said that pleas for outbound remittances are increasing, but disparity in practices and inability of different countries on the Sub-region to harmonise regulations still compound issues for the players.

“There is a myth that most Nigerians or Africans in UK or other European Countries are enjoying. So nobody thinks they might need some sorts of funding from home. But the truth is that there are many parents whose children are studying or putting up abroad; many are struggling, others are stranded and need family financial assistance. Therefore, there is need to assess the licencing of operators to create better chances of satisfying the needs of these potential customers too,” he suggested.

To Komal Rathi, chief operating officer of Transfast, remittance industry’s growth depends largely on revolutionary applications that can deliver values such as competitive rates and fees; ease and convenience and offer options tailored to needs, security and customer service.

Nodding in agreement, Emmanuel Okoegwuale, principal associate, MobileMoneyAfrica, said a competitive space is required to foster technology innovation, access and drive expansion required to drive down cost and reach underserved areas and market segments.

“Remittances from African migrants and diaspora play a significant role in supporting local health, education, food security and productive investment in commerce, agriculture and building projects across Africa. Despite the positive contributions, many of the benefits or remittance transfers are lost in intermediation as a result of high charges which are above the global average”.

Okoegwuale added that for Africans, it is not just on international remittances that African migrants face excessive charges, some of the world’s most expensive remittance corridors are within the African borders.

These high charges associated with remittance transfer to Africa, he said, have long been recognized as a constraint on development.

He regretted that while Africa has made great strides in mobile technology adoption and penetration, however, the pervasive coverage of mobile networks across Africa has yet to drive down costs in remittance markets, hence the two-day conference was conveyed to address to the issues.