The total direct remittance inflow into Nigeria has declined considerably, falling by 50% from US$2.04 billion to US$1.01 billion between January and February 20201. This is significantly lower than 2019 levels, as a total of US$23 billion was remitted in 2019, making Nigeria the highest recipient within the sub-Saharan African region2. However, with many of its citizens resident in the diaspora residing in countries that have been severely hit by the COVID-19 pandemic including Spain, Italy, the United Kingdom and the United States, their ability to work and thus remit funds has been significantly limited. Given that remittance is a major source of income for vulnerable households in developing countries, this recent development could increase poverty and further widen inequality. In the coming months, remittance flows are expected to continue declining as a recent World Bank report noted that flows to low- and middle-income countries in sub-Saharan Africa will fall by 23.1% in 20202. In order to mitigate against the impact on vulnerable households, the government should provide additional social safety nets for the poor and ensure that the distribution mechanism of the cash transfer programme is efficient and equitable.
May 19, 2020
Nigeria Economic Update (Issue 17)
Related
Nigeria Economic Update (Issue 8)
The falling tide in the international value
of Naira experienced a reversal in the review week with naira appreciating
significantly by 11 percent from N516/$ on February 17, 2017 to N460/$ on
February 24, 2017 at the parallel market the first appreciation
since December 2016. The recent rise in naira value was driven by forex
supply-demand gap closure, sequel to improvements in dollar liquidity. The
recent CBN Special intervention (e.g. the auction and sale of $370 million and
$1.5 million respectively, by the apex bank during the week) and its
revised forex policy guidelinescontributed in dousing speculations
in the parallel market, thus gradually narrowing the margin between the
interbank and parallel market rates. Given that the sustainability of naira
appreciation is strongly hinged on the improvement in foreign reserve which is
largely dependent on crude oil sales, the government should continue its
efforts at calming tensions in the Niger Delta region.
Nigeria Economic Chart Pack (2016H1)
The Nigeria Economic Chart Pack is a graphical display of relevant and periodic data to capture trends in the domestic economy. The report aims to illustrate the changes in economic trends with the aid of descriptive charts and a short note that describes the trend and drivers for the graphs.
Nigeria Economic Update (Issue 49)
OPEC weekly basket price reduced from $61.14 to $60.73 per barrel (December 1 8, 2017). Similarly, Global oil benchmark crude sold for as low as $61.22 per barrel during the week, down week-on-week by 1.8 percent. Nigerias Bonny light declined slightly by approximately 1 percent to $63.534. The fall in crude prices came after a sharp rise in U.S. inventories of refined fuel, which suggested that actual demand may be weakening5 (the EIA data shows an increase of 8.5 million barrels of stored fuel). Given that crude oil revenue remains critical to Nigerias budget performance, investments aimed at improving growth and competitiveness of other key sectors is essential to minimize distortions on budgetary expenditure.