The Central Bank of Nigeria (CBN) has announced a significant policy change, directing all authorised dealer banks to discontinue the payout of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) in cash. Instead, these allowances must now be processed through electronic channels, including debit or credit cards.
The directive, signed by the director of the trade and exchange department Dr. Hassan Mahmud, aims to bolster transparency and stability in the foreign exchange market while curbing forex malpractices.
The circular read, “Memorandum 8 of the Foreign Exchange manual and the circular with reference FMD/DIR/CIR/GEN/08/003 dated February 20, 2017, stipulate the eligibility criteria for accessing Personal and Business Travel allowances (PTA/BTA)
“In line with the Bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, All Authorised Dealer Banks shall henceforth effect payout of PTA/BTA through electronic channels only, including debit or credit cards.
“For the avoidance of doubt, payment of PTA/BTA by cash is no longer permitted. Authorised Dealers and the general public are hereby to note and comply accordingly.”
This shift marks a pivotal change in how foreign currency transactions are handled for travel purposes and underscores the CBN’s commitment to enforcing compliance and adapting to electronic means.
Commenting on the decision, CBN governor, Yemi Cardoso, highlighted the significant foreign exchange challenges facing Nigeria, attributing them in part to the substantial amounts spent on foreign education and medical tourism. Cardoso revealed that approximately $40 billion has been invested in these sectors, contributing to the depreciation of the Naira to over N1,400 in the official market.
“To address the forex scarcity and protect the Naira’s value, the CBN has also revised the operations of International Money Transfer Operators (IMTOs), restricting them to inbound transfers only and mandating that international transfers be paid out in naira,” Cardoso stated. “This policy impacts major IMTOs such as Western Union and MoneyGram and forms part of broader efforts to stabilise the foreign exchange market.”
