The Central Bank of Nigeria (CBN) has introduced a significant policy shift, mandating all authorized dealer banks to discontinue the cash payout of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA).
Instead, these allowances must now be processed exclusively through electronic channels, such as debit or credit cards.
The directive, issued by Dr. Hassan Mahmud, Director of the Trade and Exchange Department, aims to enhance transparency and stability in the foreign exchange market while combating forex malpractices.
CBN Governor, Yemi Cardoso, recently addressed the House of Representatives, attributing Nigeria’s significant foreign exchange challenges to substantial spending on foreign education and medical tourism.
Cardoso disclosed that approximately $40 billion has been channeled into these sectors, contributing to the depreciation of the Naira to over N1,400 in the official market.
In response to these challenges, the CBN has implemented revised operations for International Money Transfer Operators (IMTOs), limiting them to inbound transfers only and mandating that international transfers be disbursed in Naira.
This policy adjustment affects major IMTOs such as Western Union and MoneyGram and forms part of broader efforts to stabilize the foreign exchange market.
By transitioning travel allowances to electronic platforms and implementing stricter regulations on IMTO operations, the CBN seeks to address forex scarcity, protect the value of the Naira, and promote greater efficiency and transparency in foreign currency transactions.
