Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 20)

Based on recent estimates by the World Bank, a total of $17.2 billion diaspora remittances flowed into Nigeria in the year 20201. This represents a decline by 27.7 percent when compared to the previous year. The decrease can be attributed to restriction of movement, lull in business activities and employment uncertainties in host countries occasioned by the COVID-19 pandemic. Also, the decrease was driven by a high premium on the Naira/USD exchange rate in informal markets, coupled with an unexpected policy directive that required agent banks of money transfer operators to effect pay-outs in US Dollars rather than the Naira. Going forward, we envisage that remittance inflows into Nigeria would improve in 2021 since host countries’ economies have begun to recover from the COVID-19 shock. Ongoing policies introduced by the central bank could also encourage increased remittances.

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