The Central Bank of Nigeria (CBN) has announced the introduction of two new bank accounts for Nigerians in the diaspora – the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA). This was made known in a circular released by the Bank on Friday, 10th January 2025.
Dr W.J. Kanya, the Acting Director of the Trade and Exchange Department, CBN while making this announcement noted that the accounts presented opportunities for Nigerians in the diaspora to participate in the socio-economic development of Nigeria by partaking in the Diaspora Bond and other debt instruments issued locally to the Nigerian diaspora or available to the investing public.
It will also enable them to directly manage their funds without the need for third parties to meet their local commitments.
How these accounts will be beneficial to the Nigerian economy
Diaspora remittances to Nigeria are one of the most viable sources of income to the nation. The CBN Governor, Yemi Cardoso, in a Senate hearing in November 2024, reported that diaspora remittances between January to October 2024 stood at $4.22 billion, almost double of the $ 2.62 billion recorded for the same period in 2023.
The African Business noted that Nigeria’s diaspora remittances are currently grouped under three broad categories-
- Social welfare funding for family and friends, to cover basic health, food and education expenses.
- Real estate investments.
- Short-term investments in securities and other financial instruments.
One of the reasons the CBN gave for the accounts is to allow more diaspora Nigerians to participate in the country’s diaspora’s bond.
In June 27, 2017, the Nigerian government issued a USD300 million diaspora bond for a tenor of five (5) years in the International Capital Market and the proceeds were used to partly finance the deficit in the 2017 Appropriation Act. This bond was redeemed in June 2022 after its maturity.
In July 2024, Nigeria’s Finance Minister, Adebayo Olawale Edun, announced that the country plans to issue diaspora bonds of up to $500 billion to stabilise and grow its economy.
In November 2024, the Nigerian CBN governor also hinted that the Bank would issue diaspora bonds in the United States in 2025 and is currently targeting remittance inflow of $1 billion a month.
By introducing these new accounts, it is likely that more Nigerians in the diaspora, who had previously not opened accounts in Nigeria would seize the opportunity to do so.
These bank accounts would ease the process of remitting money to Nigeria for personal or investment purposes.
Operations of the non-resident accounts
The CBN’s circular contains a list of operational guidelines for both non-resident accounts.
Major takeaways for the operations of the accounts include –
- The NRNOA allows non-resident Nigerians to remit their foreign earnings including salaries, dividends, allowances and rental income to Nigeria and manage funds in both foreign and local currencies. The NRNIA, on the other hand, enables them to invest in assets within Nigeria, either in foreign or local currency.
- Account holders can maintain both foreign and naira accounts to facilitate transactions and participate in investment opportunities.
- Interest earned on deposits will be subject to applicable federal taxes.
- Both the NRNOA and the NRNIA are subject to international AML/CFT standards to prevent money laundering or terrorism financing risks.
- Balances in both accounts, investment principal and profits can be fully repatriated, ensuring ease of capital mobility.
- Valid or expired Nigerian passports may be accepted when accompanied by a valid foreign passport or proof of residency. Alternatively, a valid foreign passport with evidence of Nigerian citizenship of either parent may also be provided.
The circular also noted that local deposits into the NRNOA and NRNIA accounts are prohibited. This is except in the case of traceable proceeds from approved local investments linked to prior foreign currency inflows and settlement of foreign exchange transfers.
While the CBN is yet to release a follow-up circular detailing the KYC requirements for opening the new accounts, it has noted that digital platforms will be utilised to facilitate on-boarding and KYC updates.
Banks are therefore encouraged to integrate the NIBSS NRBVN platform that enables NRNs to acquire BVN for account opening purposes.