CBN targets $35bn remittances’ investments in local market

In its bid to further increase foreign portfolio investments, the apex bank has amended the Foreign Exchange Manual to allow an inflow of remittances and foreign exchange earnings in the local debt and money market instruments.
According to data from Global Knowledge Partnership on Migration and Development, remittances into Nigeria totalled $20.8 billion in 2015 and it is also expected to rise to $35 billion by the end of this year.
Tapping into this inflow, the Central Bank
of Nigeria at the weekend issued a circular which amends the Memorandum 21 of the Foreign Exchange Manual to allow forex inflows of Nigerian individuals as well as companies, resident and non-resident alike to be invested in the local debt, equities and money market instruments.
According to the circular signed by the Acting Director, Trade and Exchange Department, CBN, W.D Gotring, the move targeted at encouraging portfolio investments, allows Nigerian national or companies who inflowed foreign currencies through authorized dealers, to invest the funds in money market instruments, bonds and equities.
The amended memorandum reads “a resident/non-resident Nigerian national and/or entities and foreign national or entity may invest in Nigeria by way of purchase of money market instruments such as commercial papers, negotiable certificates of deposits, bankers acceptances, Treasury Bills, etc.”
This, the CBN said is subject to provision of evidence of remittance of funds, board resolution of local beneficiary authorizing the investment (in the case of a company) as well as the purpose of the capital importation.
The apex bank however stated that balances on export domiciliary and ordinary domiciliary accounts will not be eligible for the investments. Meanwhile, the governor of CBN, Godwin Emefiele, has insisted that the policies of the apex bank are directed at growing the fortunes of the country.
Emefiele who noted that although the CBN “has been unjustly castigated from various quarters for our work,” said “we remain certain that the actions we have taken are indeed appropriate to set our economy on the path of development in the medium- to long-term.”
Delivering a lecture to participants of the Senior Executive Course 38 at the National Institute of Policy and Strategic Studies in Kuru, Plateau State at the weekend, the CBN governor stated that the fundamental quest of the bank is to attain an inclusive growth by bolstering the country’s productive capacity and ensuring that the “Nigerian economy is indeed self-sufficient in every sense of the word.”
In his lecture entitled: “Managing Monetary Policy In Turbulent Times,” the CBN governor stated that “when you have policies that people are praising, that means such policies are not really good, because the people praising the policies know that they can circumvent them. But if people criticise your policies, especially in Nigeria, such policies are good; the people criticise them because they know that they cannot circumvent them.