Nigeria became the largest remittance-recipient country in sub-Saharan Africa and the sixth largest among low-middle income countries in 2018. The country’s official remittances amounted to $24.3billion in 2018,1 a 10.5% increase from the 2017 remittances received and accounts for 6.1% of GDP. Along with the strong economic conditions in high-income countries, the year-on-year acceleration in remittance flows is not unconnected to a slight declining trend that has been observed in remittance costs since the beginning of 2018.2 Although currently at an average of 9%, these remittance costs remain above the global average of 7% and far from the SDG target of 3%. Given the relatively strong economic and employment situation in high-income countries, and the growth in emigration in Nigeria, we expect that remittance flows to Nigeria will continue to rise. Addressing the regulatory barriers to entry in order to allow for more money transfer operators, particularly digital operators will drive the cost of remittance down and increase inflows. For instance, the N2 billion capital threshold mandated by CBN for domestic companies (compared with the N50 million for foreign companies) could be reviewed to allow companies lacking the financial clout to meet up.
Macroeconomic Report & Economic Updates
Money Supply: On a month-on-month basis, growth in M2 have accelerated overtime; reaching over N20,000 billion by April 2016. The rise in M2 at the end of 2016Q1 reflects the fast-paced rise in aggre
Recently released data by the National Bureau of Statistics (NBS) shows that there was significant increase in Nigerias total merchandise trade for 2016Q3. Basically, the total merchandise trade increased (quarter-on-quarter) by 16.29 percent to N4, 722 billion in 2016Q3;owing to 29.1 percent increase in exports and 6.2 percent rise in imports. Oil exports increased by 31 percent to N1, 943 billion, while non-oil exports increased by 20.5 percent to N440 billion. However, on the aggregate, Nigeria recorded yet another trade deficit of N104 billion, indicating continuous higher imports relative to exports. Overall, though there is improvement in the performance of non-oil sector, however, this is insufficient to effectively complement the loss in oil trade sustained since the beginning of oil price crash. This suggests that diversification into non-oil sector may not be able to rescue the economy in the short term. However, while the diversification efforts should be sustained, eliminating hurdles in oil production may be instrumental to higher exports, especially as oil price increase is gaining momentum.