The impact of the pandemic that disrupted the global economy was felt on the total remittances from Diaspora which the Central Bank of Nigeria [CBN] says crashed by 71.2 percent to $5.5billion in 2020.
Europe and America where the majority of the Diasporas live were frequented by lockdown measures to contain the spread of the pandemic and the international payments data of the apex bank revealed that Nigeria is not spared from the virus attack that affected the income of Nigerians living abroad.
The CBN data showed that total direct remittances in 2019 were $19.17billion.
The CBN data revealed that total remittances in January was $2.05billion but dropped to $1.02billion in February. The data also revealed that total direct remittance in March was $444.8million and declined significantly to $392.25million in April.
In May, it was $252.78million; June, $446.15million; July, $118.75million and August, $217.8million.
According to information about the total direct remittance of $54.36million was reported by the CBN in September, the lowest in 2020 while $217.1million total direct remittance was reported in October.
In addition, total remittances moved to $92.2million in November and closed 2020 at N214.22million.
The Head, Investment Research & Business Development, PanAfrican Capital Holdings Ltd, Moses Ojo, stated that the international payments data by CBN highlights how bad the global economic crunch affected the income of people across the world especially Nigerians in diaspora looking to send money to their families.
According to him, “Most of Nigerians in Diaspora might have either lost their jobs or seen their earnings tumble due to the global lockdowns.”
Nigeria relies on dollar inflows from remittances to improve on its balance of payment position, a critical economic indicator used in determining a country’s foreign exchange position.
Total foreign remittances into the country rose to $19.17 billion in 2019 one of the highest on record helping boost income and investments in Nigeria.
“Poor countries like Nigeria rely heavily on these inflows to soften the low income paid to citizens while also funding millions of families from education to healthcare,” Ojo added.
Nigeria remittances only came second to oil as Nigeria’s top export earner much more than foreign portfolio and direct investments into the country.
Following the introduction of the Diaspora Foreign Exchange Remittances Policy by the CBN last year, a total of $24 billion is expected annually as remittances from citizens in the diaspora.
The CBN governor, Godwin Emefiele, had said the target is predicated on the inflows accruable to countries that have similar demographic features with Nigeria, such as Pakistan, which often receives about $2billion monthly from their citizens in diaspora.
In his words, “I’m aware of the data available that, for instance, Pakistan, even in the midst of COVID-19 receives $2billion monthly from inflows from Pakistanis in the diaspora.
“If Nigeria is able to receive even if it is just $1billion monthly or moving close to $2billion monthly, I’m so certain you all know what will happen to the exchange rate in Nigeria.”
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