“It’ll Boost The Naira”: Nigerians Abroad Send Home $282m as Remittances in 3 Months
- The Nigerian economy witnessed a foreign exchange inflow of $282 million as of the first quarter of 2024
- The inflow is a decline from the $301.57 million that was recorded around the same period last year
- The Standard Bank Group predicted that Nigeria would experience a $5.1 billion forex inflow in Q2 2024
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.
Nigeria recorded $282.61 million as direct forex remittances in the first quarter of 2024.
The information was obtained from the Central Bank of Nigeria’s (CBN) website on Monday, May 13, 2024.
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Diaspora remittances into Nigeria decline
Forex remittance is the money transferred from Nigerians abroad to family or other individuals.
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The amount represents a decline of $18.96 million or a 6.28% drop compared to the $301.57 million recorded in the same period in 2023.
According to reports, during the first quarter of this year, remittances stood at $138.56 million in January, dropping later to $39.14 million in February before recording an uptick of $104.90 million in March.
Remittances to Nigeria are made via various avenues, including international money transfer operators (IMTOs) and banks.
CBN gives marching orders to IMTOs
On April 20, 2024, the apex bank partnered with IMTOs to commit to doubling remittance flows via formal channels into the country.
On February 13, 2024, the bank announced that customers will now be paid in naira for dollar transactions made via the operators.
CBN mandated the IMTOs to quote exchange rates for naira payout to recipients based on the prevailing official FX rates.
ThisDay reports that the bank also suspended IMTOs from facilitating money transfers from Nigeria to other countries.
Nigeria to receive more inflows in 2024
The development comes amid a forecast by the Standard Bank that the Nigerian economy will experience an FX inflow of $5.1 billion in the second quarter of this year.
The bank said the Nigerian economy expects inflows from various sources, including Eurobond sales, a $2.25 billion World Bank loan, and an NNPC-Afreximbank crude oil swap deal.
Analysts have said the remittance will boost the naira’s performance against the dollar.
According to them, the naira’s current fall is due to a liquidity squeeze in the FX market.
Maurice Ibeh, a financial analyst, said Nigeria needs FX remittances and interventions from the CBN.
He said the naira's excellent performance in April was due to a boost in the dollar supply the previous month.
“The remittances are good but could be better to shore up the naira’s performance.
Apart from the remittances, Nigeria needs to expedite action on crude oil production to earn money forex now that oil is selling above $80 per barrel,” he said.
Boost for the Naira as foreign reserves gain
Legit.ng earlier reported that after several weeks of depletion, Nigeria’s foreign exchange reserves increased marginally by about $262 million in 19 days.
Data from the Central Bank of Nigeria (CBN) reveals an uptick in reserves, closing at $32.369 billion as of May 7, 2024, up from the $32.107 billion recorded in the previous month.
Nigeria’s reserves have experienced a steady decline from $34.45 billion in March 2024 due to falling oil prices, debt servicing, and other CBN obligations.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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