In normal times, it would take Amaka less than five minutes to receive money from her brother in the U.S, but it was December 2020 and the new Central Bank of Nigeria’s International Transfer policy had just been announced, so she wasn’t able to receive the money through Sendwave, the channel her brother normally used. And like many Nigerians, She hadn’t paid enough attention to the policy announcement enough to realise how much it would affect her.
“I was doubtful when I first heard about the policy. I was like, how is this possible? It just seemed very impossible that we would no longer be able to receive money directly in Naira. Plus, I was so certain that it wouldn’t affect the app my people abroad would usually use to send me money, so I wasn’t really afraid until I actually had to receive money,” the 26-year-old entrepreneur tells us.
On December 2, 2020, the CBN issued a directive barring International Money Transfer Operators from directly sending money to Nigerian accounts and mandating that they be made as cash-pick-ups instead. “So, if you have someone wanting to send you dollars, you will receive the money in a domiciliary account as against the bank converting it for you in Naira. The policy is just to curb dollar arbitrage. A situation where some people buy low, hoard it and sell to the market when the dollar is rising,” Tunde, a financial analyst explains.
Amaka’s brother would eventually switch to WorldRemit, but it would take up to a month before the money would actually get to her. Between visiting banks, getting her I.D authentication delayed due to network problems at those banks, finally receiving the money in her domiciliary account, and having to exchange, at an unfavourable rate in the black market, the new CBN policy took a toll on her as she needed the money to make an urgent business transaction that would enable her resume operations for the new year.
Unfortunately, Amaka isn’t the only one who has been affected by this policy. “I was expecting payment in USD from the UK and to be on the safer side, I filled in my friend’s domiciliary account details on the invoice (I didn’t have a domiciliary account at the time). After waiting three long weeks for the payment to come in, I received a mail from the sender saying that they had tried twice to send my payment but it simply wasn’t going through. Strangely, the system was not recognising it as a USD dominated account, they said.” 22-year-old Halima, tells us.
“At this point, I was already very frustrated because I was quite broke. I suggested the cash pickup option on World Remit to them. They sent it that night and I went to the bank the following morning to get it. We started the process but we got stuck midway because I was supposed to receive an OTP on my phone but it simply did not come through. I had to reach out to the sender to confirm my phone number and full name and address and all such details. For hours, we did this back and forth. The same happened to other customers. I went home, came back the next day, the same thing. And then I contacted WorldRemit, and they said they couldn’t do anything or tell me anything unless the sender contacted them. Very nerve-racking because I truly did not want to bother the sender again, but they were so kind and reached out to WorldRemit. WR then gave them the OTP and they sent it to me. I took it to the bank and finally got my money,” she says.
The top reasons the Nigerians we spoke to have cited for not feeling excited about the new policy rests with the danger and anxiety of carrying hard cash around as well as the arduous task of visiting banks in Nigeria. And oftentimes, opening domiciliary accounts.
Simone, who lives in the U.S hasn’t had much trouble with sending money back to Nigeria. Before the CBN policy, she would normally use WorldRemit and Sendwave, but when she was notified of the policy, she switched to Sendcash, a bitcoin platform she had signed up to some months prior. “As far back as October, I’d started doing USD to BTC to NGN transactions due to the quick changes in the exchange rate. The Naira devaluation made me move to other platforms and the policy change cemented the move.” She says.
23-year-old Ovie, on the other hand, has found that his clients are wary of bitcoin transactions and as a freelance graphic designer who often works with clients outside of Nigeria, it has been hard figuring out how to receive money, especially when those clients are often unlikely to want to use unconventional payment methods that aren’t wire transfers or Paypal, which isn’t fully available to Nigerian users.
“I’ve not quite found a solution that fits all my clients. And this is why I’ve been avoiding most foreign gigs at the moment. I don’t want to end up disappointed,” says Ovie.
But some people whose accounts cannot be directly credited into their domiciliary accounts are turning to services such as the aforementioned WorldRemit, Western Union, and Sendcash for ready alternatives. Halima was able to receive money that was sent to her that same week through Western Union. “The cash pickup didn’t take much time. Thirty minutes max. I didn’t need an OTP. Just my ID card and the sender’s details,” she explains.
For Simone, all her transactions are now carried out with Sendcash. “For friends here (in the US) who have had the same issues, I’ve been like, just use Sendcash since the rate has always been better anyway. I buy Bitcoin on Cashapp, use Sendcoins to convert to naira, then the recipient gets Naira.”
And according to Tunde, the banks are the major channels authorized for transactions. “Banks are required to pay the dollars to the beneficiaries either via transfers to domiciliary accounts or in cash. So the recipient has two options: leave your money in the domiciliary account with the bank or take cash. But essentially, the intention of this is to ease the pressure on the exchange rate, but the economy needs diversification, not the plug and fix CBN is doing. And at the end of the day, Nigerians bear the brunt for this through low exchange rates amongst other risks.”