The Central Bank of Nigeria (CBN) has taken steps to reform the process of accessing Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) by instructing all authorised dealer banks to discontinue cash payments.
According to a circular issued on Wednesday, 14th February, 2024, all payments for PTA and BTA must now be processed electronically, including debit and credit card transactions.
The directive, outlined in a circular titled “Allowable Channels for Payout Of Personal Travel Allowance (PTA) And Business Travel Allowance (BTA),” explicitly prohibits authorised banks from paying PTA and BTA in dollar cash. Signed by the Director of the CBN’s Trade and Exchange Department, Dr Hassan Mahmud, the circular aims to enhance transparency and stability in the foreign exchange market while curbing malpractices.
This policy shift aligns with the CBN’s commitment to fortifying the naira and closely monitoring foreign exchange market activities. The emphasis on electronic channels for both PTA and BTA shows the bank wants to achieve modernisation and efficiency in foreign transactions.
Speaking on the naira’s state, CBN’s Governor Yemi Cardoso addressed the House of Representatives last week, attributing the naira’s volatility to factors such as foreign education and healthcare tourism. Governor Cardoso revealed that between 2010 and 2020, approximately $40 billion was spent in these sectors, causing a significant depreciation of the naira.
In response to foreign exchange challenges, the CBN also announced the removal of the cap spread on interbank foreign exchange transactions on 8th February, adding to the bank’s efforts to stabilise the Nigerian currency.
The CBN’s new directive signifies a pivotal shift in the country’s approach to foreign exchange management, with a clear focus on promoting transparency, efficiency, and stability in the foreign exchange market.