Diaspora Cash Remittances Drop By 27% to $17.2bn

In apparent reflection of the severe impact of the COVID-19 pandemic on the incomes of Nigerians living abroad, diaspora remittances influx into the country fell 27% year-on-year, (YoY) to $17.2 billion in two020 from $23.55 billion.

The twenty 7% decline represents eighteen.

Two percentage points below the eight.8 per cent decline projected by the planet Bank for each Federal Republic of Nigeria and also the desert African. in a report issued in Gregorian calendar month and titled, “Migration and Development temporary 33” the planet Bank projected that remittances influx into Sub-Sahara continent can fall to $44 billion in 2020 from $48 billion in 2019.

 It conjointly projected thatremittance influx into Nigeriawill fall to $21.7 billion in 2020 from $23.8 billion in 2019. 

The planet Bank said: “Remittances to Sub-Sahara continent square measure expected to decrease considerably by around 8.8 % between 2019 and 2020, from $48 billion to $44 billion because of the COVID-19 pandemic, restrictions in movement, and their devastating impacts on the worldwide economy. 

“Nigeria remains the biggest recipient of remittances within the region, and is that the seventh-largest recipient amonglow and middle-income countries (LMICs), with projected remittances to say no to around $21.7 billion, a over $2 billion drop compared with 2019”. 

However, the twenty seven per cent decline in remittances into Federal Republic of Nigeria in 2020 imply that the negative impact of the pandemic on the economic fortunes of Nigerian’s in diaspora is a lot of severe than expected. CBN’s figures this can be confirmed byFinancial Vanguardanalysis ofquarterly statistics of the financial institution of Federal Republic of Nigeria (CBN) that showed that remittances influx fell, YoY, in each 1/2 the year. 

Within the half of 2020, H1’2020, payment influx fell by twenty three.7 per cent, YoY, from $11.82 billion in H1’2019. This trend worsened in H2’2020 with payment influx falling by thirty per cent, YoY, to $8.2 billion from $11.73 billion in H2’2020. more analysis, however, showed associate upward trend in remittancesin the Q3’2020 and Q4’2020. after suffering Quarter-on-Quarter (QoQ) decline of five.3 per cent to $5.64 billion in Q1’2020, and 40 per cent decline to $3.38 billion in Q2’2020, remittances influx revived and rose QoQ by 15per cent to $3.89 billion in Q3’2020 and more by 10.6 per cent to $4.31 billion in Q4’2020. 2021 prospects the planet Bank projected more decline in remittances influx for Federal Republic of Nigeria and alternative countries within the Sub Saharan region in 2021. 

However it but stressed the requirement for state measures to deal with the downward trend. It stated: 

“This declining trend is predicted to continue in 2021, once remittances square measure projected to decrease by around five.8 % to succeed in $41 billion (in Sub Saharan Africa). The decline in payment flows is attributed to a mix of things, all driven by the COVID-19 crisis in major destination countries, as well as EU countries, the us, China, and GCC countries. 

Desert migrants square measure disproportionately affected in host countries as several square measure in precarious operating conditions and informal jobs, with high vulnerability to contagion and loss of employment. 

Additionally, these migrants square measure usually excluded from social protection systems, health care, and government information measures. “For countries wherever remittances account for an outsized share of gross domestic product, a pointy decline in payment inflows is predicted for 2020 and 2021, as several migrant staff have seen their financial gain plummet, particularly in OECD countries. 

“Governments efforts to facilitate payment inflows in these economies would be required additionally to a lot of efforts to support house payment recipients World Health Organization are facing a big decline in remittances.” Apparently in response to the present recommendation, the CBN in December 2020, introduced a policy thatallowsbeneficiaries of diaspora payment to be paid in foreign currency. 

This was followed up with another policy proclaimed earlier this month, taggedNaira4dollarscheme, whichinvolves the CBN paying diaspora NigeriansN5 rebate for each $1 of remittances sent through commissioned International financial Transfer Operators (IMTOs). Consequently,analysts at FBNQuestMerchant Bank opined that the downward trend in remittances influx into Federal Republic of Nigeria in 2020 are reversed in 2021. Citing the upward trend in Q3’2020 and Q4’2020 additionally as recent measures introduced by the CBN to spice up remittances influx into the country as basis for his or her optimism, they said: “The q/q improvement is maybe because of the actual fact that the low purpose within the COVIDcycle for those G7 economies wherever the Nigerian diaspora is focused was the previous (second) quarter of 2020. “Theories on Nigeria’s relative underperformance abound. It might be that the Nigerian diaspora incorporates a significantly massive presence in those economies that have taken the biggest hits from the virus (the Eurozone and also the UK). The exchange-rate regime (i.e. the sense that the recipient wasn't obtaining ‘full value’ in naira) could are another issue. “Looking ahead, we might expect a recovery in remittances because the G7 economies rebound.” CBN Governor Emefiele conjointly expressed confidence that the recent measures of the apex bank can boost remittances influx, adding that weekly payment influx had accrued to $30 million from $5 million, following measures introduced in December. Speaking at the diaspora webinar union by Fidelity Bank, wherever he conjointly proclaimed theNaira4dollarscheme, Emefiele said: 

“We believe our efforts at driving payment inflows into Federal Republic of Nigeria would yield positive results as we attempt to confirm formal banking channels supply cheaper, quicker and a lot of convenient ways that for remitters to send funds to beneficiaries. “Reducing the value of causing payments could be a important thanks to boost remittance inflows to Federal Republic of Nigeria. In general, the new policy is predicted to enlarge the scope and scale of interchange inflows into the country with a read to stabilising the rate of exchange and supporting accretion to external reserves. a lot of significantly, it'll give a chance for Nigerians living abroad to form investments in their home country.”