A season of giving

CBN's new order to close all naira accounts of IMTOs, NIN is now a must-have if you wish to keep your Nigerian SIM

Hello there,

This isn’t a final goodbye from us but this is our final edition for the year. Thank you for sticking with us. 


A Season of Giving

Christmas is almost here and you can hear the jingles of the festive period, telling us we are in a season of giving. For Nigeria, a season of giving would involve receiving remittances from its citizens living or working abroad. Over the last six years, over 17 million expatriates have made international money transfers to Nigeria of about $96.5 billion with the majority of the money coming from the USA, Switzerland, UAE, Cameroon, Russia, and China.

The Anti-Santa

The Nigerian Central Bank of Nigeria recently banned payment service providers (POS Machine operators), Mobile Money Operators, Switches, and Processors (like Interswitch, Flutterwave) from receiving diaspora remittances. In addition to this, it stops International Money Transfer Operators (IMTO) from sending money to Mobile Money Operators and also stops the integration of payment services providers to IMTO accounts. IMTOs include services like Sendwave and TransferWise. With this change, recipients can only receive foreign currency directly into their Nigerian domiciliary accounts.

Good intentions

The headlines may sound cruel but the CBN really has legit reasons for this. First of all, using the market exchange rate makes the recipients gain more in value. It also increases the supply of foreign currency in the country, causing the naira to strengthen in value.

Conclusively, The CBN believes if dollar remittances are paid directly to Nigerians, they will, in turn, sell at the black market, injecting much-needed supply that could help stabilize the exchange rate.  

Fintech - Cream of the Crop

There has been a growing focus in the remittance sector among fintech companies. This is because some of them have struck partnerships with International Money Transfer Operators to ease the problem of international money transfers in Nigeria and Africa. These companies provide a means for users to quickly receive their funds in naira, without going through the hassle of converting it in the black market.

Looking Ahead

This is a very tricky situation to be in for the users of the services and the service providers. For the users, their desire for convenience is disrupted as transfers now have to be deposited in domiciliary accounts. Some users might not have domiciliary accounts while others would have to go through the hassle of converting the foreign currency to naira. 

For the service providers, they'd have to realign their business processes to fit this change. It should also be noted that fintech like Paga, Interswitch, eTranzact, and Flutterwave had an approved IMTO license from the CBN in 2019.

All these show the volatile nature of the fintech business as it is prone to heavy regulation. A price to pay for delving into a market with unending opportunities.


No ID, no mobile connections

2020 has been a hard year but Nigerian authorities have continuously dished out orders to regulate communication to keep people in check. 

Earlier in the week, the Nigerian Communication Commission (NCC) gave a new directive to Mobile Network Operators (MNO) to suspend mobile numbers of people without a National Identity Number (NIN). this order, they said, must be implemented before the new year.

This isn’t the first time

The NCC had initially ordered the suspension of the registration of new SIM cards by all Mobile Network Operators (MNOs) in the country. At the beginning of the year, the NCC imposed a regulation requiring users to complete digital identification procedures with the National Identity Management Commission (NIMC) and provide the details to their mobile network provider. 

So why now tho? 

The commission said this new directive is an urgent drastic measure that has now become inevitable to improve the integrity and transparency of the SIM registration process but questions arising from concerned Nigerians are why must it be this time? What is the existing process to getting a national identity number and what exactly is wrong with it?

The existing means of obtaining NIN

NIMC was launched in 2007 to create and manage Nigeria’s national identity database but they have continuously had trouble issuing ID cards to Nigerians. As of May 2020, NIMC revealed that only 38% of Nigerians have any form of identification. This means less than one-quarter of Nigeria’s total population does not have a national identity number. The major explanation for the low turnout on registration by Nigerians can be deduced following the discouraging process of registration where people stand in long queues at the  NIMC centers to have their information manually imputed on a computer. Having considered the above processes, how will millions of unregistered Nigerians get their NIN in the space of two weeks? 

Someone must pay for this?

The NCC employed mobile network operators to cut off any user without the NIN. if implemented, this puts them at risk of suffering major financial loss. The NCC also stands to lose in tax returns. Retail communication outlets are also at risk of losing revenues.  

On the flip side: The commission will still cash out. To retrieve their NIN via their mobile phones, a unique USSD code, *346# have been provided by the NCC, each time the code is dialed by mobile users, it attracts a ₦20 charge.    


Worth reading 📚

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– Doris Lessing