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The Impacts Of CBN Currency Float On Your Visa Application.
The recent decision by the federal government of Nigeria to mandate the Central Bank of Nigeria (CBN) to float the naira and establish a single exchange rate has raised several questions. One of the key concerns is how this move will affect visa applications and the implications it holds for individuals planning to relocate. In this article, we will explore the effects of the CBN’s currency floating and delve into the various aspects that might influence your relocation plans.
Let’s begin by understanding the changes brought about by the CBN’s decision. The CBN has aligned the official rate of the naira from banks at a fixed rate, eliminating the previous disparity between the official rate and the black market rate. This means that both banks and the parallel market now have to choose an exchange rate, putting an end to the fluctuating fees. Previously, the dollar to naira exchange rate exhibited a significant disparity, with the CBN rate ranging between 400 and 450, while the black market rate exceeded 700. Currently, the exchange rate stands at 714 naira per dollar.
- INCOME CALCULATION
One of the areas directly impacted by this currency floating is the calculation of income for visa applications. Embassies, particularly the UK embassy, have traditionally benchmarked their assessment of Nigerian visa applicants’ income against the Nigerian bank rate. In the past, they often relied on the OANDA rate, which closely mirrored the CBN rate. However, with the convergence of the official rate and the black market rate, the required income amount has risen significantly. What used to be a simple conversion of 1 pound to 500+ naira has now escalated to 800+ naira. Consequently, an applicant with a monthly income of 500,000 naira, which previously translated to approximately 1,000 pounds, now finds themselves at around 700 pounds. This substantial increase in the required income may impact an individual’s disposable income for travel purposes.
2. EXPENSES AND FUND AVAILABLE FOR YOUR TRIP
Moreover, the funds available for the trip itself are also affected by the CBN’s currency floating. All applicants, especially those seeking to relocate to the UK are required to provide an estimate of their monthly expenses. These expenses include rentals and utilities but also various other costs and subtract it from their monthly income to determine the funds available.. With the currency floating, the calculation of expenses in naira has increased by approximately 40%. This rise poses challenges in attaining the necessary funds for a short trip, necessitating the need to provide additional income sources to increase the chances of getting an approval.
3. PROOF OF FUNDS
When it comes to visa applications for Canada, providing proof of funds is an important aspect of obtaining approval. It demonstrates to the Canadian government that applicants have the necessary financial resources to support themselves during their stay in the country. However, in recent developments, there has been an increase in the official government of Canada’s exchange rate, making it even more necessary for applicants to increase the Nigerian Naira (NGN) in their proof of funds.
The decision by the federal government to implement currency floating through the CBN has significant ramifications for individuals planning to relocate and apply for visas. The convergence of the official exchange rate with the black market rate has led to an increase in the income requirement for visa applications. Additionally, the calculation of expenses in naira has risen, making it more challenging to acquire sufficient funds for relocation which makes it necessary for aspiring visa applicants to consider alternative income avenues to boost their chances of a successful relocation and visa application.
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