Agusto & Co. says CBN’s unpopular policies constrained Nigeria’s remittance flow

Agusto & Co., a Pan-African Credit Rating Agency, said unpopular policies by the Central Bank of Nigeria (CBN) constrained remittance flow into the country.

The credit rating agency said the CBN compounded the challenges faced by remittance flow from many developed economies, which were experiencing slow economic recovery and cost of living crises in 2022.

Note that remittance flow into Nigeria is mostly driven by persons that have migrated from the country to developed countries in search of financial growth.

According to Agusto & Co. in a report titled ‘Nigeria Diaspora Remittances: A Tale of Emigration, Policy and Technology,’ improved economic conditions in developed countries will boost remittance into Nigeria.

The agency projected that remittance flow will rise to $26 billion by 2025, from $20.1 billion in 2021, indicating the financial position of Nigerians in advanced countries will improve relative to the growth of the developed nations’ economies.

In the report, Agusto & Co. said: The slow economic recovery and cost of living crises that confronted many developed economies in 2022 were indicative of this trend and constrained remittance flows into Nigeria. This was further exacerbated by the implementation of capital controls and other unpopular policies by the Central Bank of Nigeria (CBN), which restricted inflows through official channels.

“Remittances from the diaspora have played an increasingly essential role in Nigeria’s economy, serving as an important source of foreign exchange earnings and a catalyst for economic growth and development.

“As more Nigerians, discouraged by the country’s gloomy economic conditions, look overseas for the opportunity, their remittances will continue to play, a crucial role in sustaining the Nigerian economy.

“The growth of these funds has been exceptional, empowering dependents to meet their basic needs, pursue education, access healthcare, and embark on entrepreneurial endeavours.”

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