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Diaspora Remittances to Nigeria Drop by 71.2 percent in 2020 - CBN

Diaspora Remittances to Nigeria Drop by 71.2 percent in 2020 – CBN

The Central Bank of Nigeria (CBN)  has disclosed that total remittances from Diaspora dropped by 71.2 per cent to $5.5billion in 2020 to undermined the effect of global COVID-19 lockdown.

The international payments data of the apex bank revealed that Nigeria total remittances tumbled in 2020 as COVID-19 pandemic affected the income of Nigerians living abroad.

The CBN data showed that total direct remittances in 2019 was $19.17billion.

The CBN data revealed that total remittances in January was $2.05billion but dropped to $1.02billion in February. The date also revealed that total direct remittance in March was $444.8million and declined significantly to $392.25million in April.

In May, it was $252.78million; June, $446.15million; July, $118.75million and August, $217.8million.

Recall, the World Bank has predicted that inflow of Diaspora remittances to Nigeria will drop by $2 billion in 2020 to $21.7 billion as against the $23.8 billion the country recorded in 2019.

The World Bank in a report hinged the decline in remittances from Nigerians living abroad on an account of the double whammy of the COVID-19 pandemic and the attendant economic crisis that has continued to spread.

Our correspondent gathered that a total direct remittances of $54.36million was reported by the CBN in September, the lowest in 2020 while $217.1million total direct remittance was reported in October.

In addition, total remittances moved to $92.2million in November and closed 2020 at N214.22million.

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The Head, Investment Research & Business Development, PanAfrican Capital Holdings Ltd, Mr. Moses Ojo, stated that the international payments data by CBN highlights how bad the global economic crunch affected the income of people across the world especially Nigerians in diaspora looking to send money to their families.

According to him, “Most of Nigerians in Dispora might have either lost their jobs or seen their earnings tumble due to the global lockdowns.”

Nigeria relies on dollar inflows from remittances to improve on its balance of payment position, a critical economic indicator used in determining a country’s foreign exchange position.

Total foreign remittances into the country rose to $19.17 billion in 2019 one of the highest on record helping boost income and investments in Nigeria.

“Poor countries like Nigeria rely heavily on these inflows to soften the low income paid to citizens while also funding millions of families from education to healthcare,” Ojo added.

Nigeria remittances only came second to oil as Nigeria’s top export earner much more than foreign portfolio and direct investments into the country.

Following the introduction of Diaspora Foreign Exchange Remittances Policy by the CBN last year, a total of $24 billion is expected annually as remittances from citizens in diaspora.

The CBN governor, Mr. Godwin Emefiele, had said the target is predicated on the inflows accruable to countries that have similar demographic features with Nigeria, such as Pakistan, which often receives about $2billion monthly from their citizens in diaspora.

In his words, “I’m aware from the data available that, for instance, Pakistan, even in the midst of COVID-19 receives $2billion monthly from inflows from Pakistanis in diaspora.

“If Nigeria is able to receive even if it is just $1billion monthly or moving close to $2billion monthly, I’m so certain you all know what will happen to the exchange rate in Nigeria.”

Emefiele last December was optimistic that consistently meeting the monthly target of $2bn would reduce so much pressure on the Deposit Money Banks from calling the CBN to fund their commercial operations.

About Bukola Olanrewaju

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