Nigeria CBN Cracks Down on Forex Malpractices: Ends Cash Payments for Travel Allowances

The Central Bank of Nigeria (CBN) has introduced a pivotal policy shift, instructing authorized dealer banks to discontinue the payout of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) in cash.

This directive, signed by Dr Hassan Mahmud, the Director of the Trade and Exchange Department, mandates that these allowances must now be processed exclusively through electronic channels, such as debit or credit cards. The move is aimed at enhancing transparency, promoting stability in the foreign exchange market, and curtailing forex malpractices.

The circular, which outlines the eligibility criteria for PTA/BTA, unequivocally prohibits the payment of these allowances in cash. CBN Governor Yemi Cardoso attributes Nigeria's forex challenges to substantial spending on foreign education and medical tourism, disclosing an estimated $40 billion investment in these sectors.

In response, the CBN has further revised the operations of International Money Transfer Operators (IMTOs), restricting them to inbound transfers only and mandating international transfers to be paid out in Naira. This policy aligns with broader efforts to stabilize the foreign exchange market amid ongoing economic challenges.