CBN policy to drive up diaspora remittances in 2022
Diaspora remittances into Nigeria is set to surpass Foreign Direct Investment (FDI) for the second consecutive year given some of the favourable policies instituted by the Central Bank of Nigeria (CBN) alongside technological innovations, WorldRemit, a cross-border digital payment service provider, has said.
Diaspora remittances into the country had fallen by 27.7 percent to $16.8 billion in 2020 from $23.24 billion in 2019 on the back of job losses occasioned by the COVID-19 pandemic that dulled inflow into the country.
However, the inflow saw an uptick in the first half of the year (H1’21), rising to $9.22 billion, following some initiatives by the CBN to boost inflow. FDI during the same period stood at $77.97 million.
The World Bank has also projected a 2.5 percent increase in remittance to $17.6 billion at the end of the year.
Commenting on the state of remittance inflow into the country, Gbenga Okejimi, Nigeria Country Director, WorldRemit, said the growth is expected given the favourable policies and regulations that the CBN has since instituted.
He noted that digital remittance channels have been a game-changer in the cross border payment industry, saying that continued investments and support for innovation in international digital money transfer will increase remittance growth into the country.
He stated: “We have begun to record an increase in the flow of remittances into Nigeria even as the World Bank has projected a moderate rebound estimating growth to be at around 6.2% for 2021 . Based on this projection, remittances will surpass foreign direct investment for a second consecutive year, further proving that remittances are one of the most important sources of income in the country.
“The CBN Naira 4 dollar scheme, directives allowing recipients to receive funds in dollars and automatic opening of domiciliary bank accounts has been instrumental to this projection.
These regulations have encouraged Nigerians in the diaspora to send money through official channels, meaning funds previously sent by Nigerians through unofficial means can now be tracked. The regular stakeholder engagements between the Regulators and providers have also encouraged innovative solutions such as seamless API integration and USD availability among others.
“In 2020, digital technology was a vital element that prevented a total shutdown of economies and today it continues to drive the growth of remittances, enabling almost-instant receipt of funds directly as bank transfers or cash pick-up. Therefore, continued investments and support for innovation in international digital money transfer will increase remittance growth into the country.
