Diaspora remittance drops to $1.98bn as CBN’s N5 for $1 promo makes little impact

Despite efforts by the Central Bank of Nigeria (CBN) to increase diaspora remittances, money sent home by Nigerians living abroad fell by 62 percent.

Latest data obtained from CBN website showed the total direct remittances stood at $1.96 billion in first 10 months of 2021 compared to the $5.21billion Nigeria recorded during the height of COVID-19.

It was even worse when you consider that pre-pandemic (2019) $19.2 billion was sent home in the first 10 months of 2019.

The drop in remittance was despite the ongoing Naira 4 Dollar Scheme initiated on March 5 to encourage the use of official means to send money back to Nigeria.

When CBN introduced the policies, licensed international money transfer operators (IMTOs) were instructed to pay N5 for every $1 received as remittance inflow.

READ ALSO: IMF addresses impact of multiple forex rate on eNaira as remittance crashes two-straight years

A similar policy was adopted by other countries like Bangladesh to boost remittance through official means.

However, the Naira, as at the time of this report was trading at N410 when purchased legally, but it traded at N560 on the black market. It’s simple to see why many people chose to use unapproved routes that aren’t recorded in CBN data.

Breakdown of CBN data showed that in January 2021, $185 million was remitted, while in February, $452 million was the total direct remittance.

While in March and April $227million and $165mllion were sent home respectively.

The remittance dropped to $150million in May; $378million in June and $37.6 billion in July 2021.

For August and September, the apex bank reported $86 million and $224 million was remitted respectively.

In October $51.74 million was sent home.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now