Nigeria records worst remittance flow in Africa, as cryptocurrency threatens CBN, black market

Out of seven countries surveyed, Nigeria recorded the highest dip in remittance flow in 2020, a new report by Agusto has shown.

The industry researcher also stated that cryptocurrency might replace official channels.

Nigeria had occupied the seventh position, coming behind Egypt, Morocco, Ghana, Kenya, Senegal and Zimbabwe, during a period COVID-19 pandemic and lockdown dragged earnings down, leading to a decrease in remittance flow.

Agusto projected in its report released on Tuesday, that the country’s remittance record will get better this year as recipients of the funds are allowed by the Central Bank of Nigeria to get their funds in foreign currency.

It also stated that the remittance flow will increase as more well-educated Nigerians migrate out of the country. Stimulus packages provided by foreign governments in their countries will also contribute to the rise in capital inflow into Nigeria.

Currency depreciation in Nigeria was also factored as solution to the low remittance recorded by Nigeria. In 2020, the country recorded $21 billion in remittance flow. This was lower than the $23.8 billion and $24 billion recorded in 2019 and 2018 respectively.

READ ALSO: Bitcoin nears $60,000 as Ebay eyes most popular cryptocurrency

According to Agusto’s head, Jimi Ogbobine, there will be improvement in 2021, as remittance will increase to $22 billion, and $22.5 billion by 2022.

The drop in recorded remittance in the last three years occured as cryptocurrency becomes more popular within the country. More Nigerians in the diaspora are using cryptocurrency to send money home in order to avoid high charges and inflation.

The bureau de change association in Nigeria had also warned that cryptocurrency could displace official channels used for sending money to Nigeria if the CBN doesn’t find a way to prevent the digital assets from penetrating further.

Already, the financial regulator has cut link between the banks and cryptocurrency exchanges, but individuals are still conducting crypto transactions through peer-to-peer, in order to avoid CBN clampdown.

By Fakoyejo Ayodeji

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