The Central Bank of Nigeria (CBN) has revealed that the country received a total of $1.86 billion as total direct remittances from Nigerians abroad between January and September this year, an increase of 2.1 percent from $1.82 billion in the corresponding period of 2022.
The apex bank in its International Payment had disclosed that total direct remittance stood at $2.16 billion in 2022, a threshold the country could still hit or surpass if remittances improve in the second half of the year.
The monthly breakdown of the data shows that Nigeria recorded $79.2 million in remittances in January 2023. In February, total remittances increased slightly to 83.8 million, while $138.6 million was recorded as total direct remittances in March.
In April, the country received $150 million as direct remittances, while the inflow increased to $202.9 million in May. For June 2023, total direct remittances to the country stood at $297.5 million.
The data further revealed that total direct remittances in July stood at $241.22 million in July and reached $590.57 million in August 2023. In addition, the CBN disclosed $71.24 million in total direct remittances in September 2023.
Direct remittances come into the country via International Money Transfer Operators, and banks, among others. According to the recently suspended CBN Governor, Godwin Emefiele, there are four major sources of FX inflow into Nigeria. He said these include proceeds from oil exports, proceeds from non-oil exports, Diaspora remittances, and foreign direct/portfolio investments.
Last year during the launch of ‘The RT200 FX Programme’ to boost forex supply in the country through the non-oil sector in the next three to five years, Emefiele had said that policies and measures introduced by Diaspora inflows and remittances from an average of $6 million per week in December 2020 to an average of over $100 million per week by January 2022.
The report released in the fourth quarter of 2022 titled, “Remittances Brave Global Headwinds Special Focus: Climate Migration,” stated that it represents a 7.5 percent rise from the prior year of 2021.
The report stated: “Nigeria, the largest recipient of remittances in the region, which witnessed a sharp recovery in flows during 2021 a 13.2 percent, maintained the improved momentum of 2021 into the first quarter of 2022. However, growth fell in Q2 data to 0.5 percent vis-à-vis the same period of 2021. Moreover, the country is reaping little benefit from the surge in crude oil prices, while the expatriate community faces real income losses in the United States, the United Kingdom, and the Euro Area. A falloff in remittance flows to growth of 7.5 percent is likely for 2022.”
Furthermore, the report noted that the remittance outlook cites that the risk of further adverse developments in the external environment will persist through 2023, “and act to lower the pace of remittance flows to Africa to 3.9 percent. Price pressures for wheat, oil, and fertilizers are likely to continue into 2023, although ebbing from the peaks of the previous year.
“Food affordability and the deterioration of real incomes across African states will place a damper on economic growth, while government spending on subsidies and support for farmers will widen fiscal gaps. Little easing of current account deficits is seen given the continuing adjustment to the large terms of trade changes of 2022. And depreciating currencies against the US dollar will magnify the rise in import prices measured in local currency.”
“Remittance outturns will depend on the balancing of increasing needs for support from the African overseas labour force, and the availability of income in the host countries to be remitted. Real wages are now declining in the United States and the euro area, indicating the likelihood of softening remittance flows. For larger countries, Nigeria is anticipated to see continued moderation inflows to a 4.5 percent pace in 2023. Kenya should experience a modest slowing to gains of 5.5 percent,” the report stated.