Macroeconomic Report & Economic Updates

May 8, 2019

Nigeria Economic Update (Issue 15)

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 […]

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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.




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Nigeria Economic Update (Issue 24)

Crude oil price increased, in the week under review, to its highest price in 2016. Nigerias bonny light increased by $1.38 from $48.02 per barrel on May 20, 2016 to $49.64 per barrel on May 27, 2016, while Brent crude was sold for $50 per barrel on May 26, 2016. The catalyst for price gains in the period under review is the supply-side contractions, with unplanned production shortages in Nigeria, Canada and Iraq. The upward trend of prices may unlock more supplies in subsequent weeks, but the OPEC meeting scheduled for June 2, 2016, could moderate the effect. Nigeria is expected to benefit from crude oil price rising above the $38 per barrel benchmark. Unfortunately, supply disruptions continue to negatively affect oil revenue and may have contributed to the depletion of external reserve by over $153 millionthis week. The federal government, in collaboration with relevant security agencies, should find a lasting solution to the vandalism of oil pipelines and production facilities.