In the first quarter (Q1) 2024, Nigeria witnessed a 6.28% year-on-year decline in forex remittances, amounting to $282.6 million compared to $301.57 million in Q1 2023.
This was disclosed by the Central Bank of Nigeria (CBN) in its “International Payments” data on Monday.
On a Month-on-Month (MoM) breakdown, the apex bank reported $138.56 million total direct remittances in January 2024, a growth of 75 per cent from $79.19 million in January 2023, while in February 2024, it stood at $39.15million, a decline of 53.26 per cent from $83.76 million in February 2023.
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Mrs. Hakama Sidi Ali, the Acting Director of Corporate Communications, CBN, noted that the foreign inflows in February 2024 were driven by higher remittance payments from Nigerians living abroad and a spike in the purchase of naira assets by foreign portfolio investors.
Meanwhile, total foreign exchange direct remittances were at $104.91 million in March 2024, a further decline of 24.3 percent from $138.63 million reported by Apex Bank in March 2023.
There are four major sources of FX inflow into Nigeria. These include; proceeds from oil exports, proceeds from non-oil exports, Diaspora remittances, and foreign direct/portfolio investments.
While there have been concerns over the decline in total remittances to the country despite the surge in the number of Nigerians relocating abroad, experts disclose that there may not be any cause for alarm now. According to them, the decline in remittances in Q1 2024 could be attributed to several factors including the weakening of the local currency, and policy directions of the CBN.
However, the decline in Nigeria’s forex remittances doesn’t come as a surprise due to the fact that the country’s economy has been experiencing crippling dollar shortages that have pushed the naira to record lows, forcing a devaluation.
In 2022, during the launch of The RT200 FX Programme’ to boost foreign supply in the country through the non-oil sector in the next three to five years, the CBN had said that policies and measures Improved Diaspora inflow and remittances from an average of $6 million per week in December 2020 to an average of over $100 million per week by January 2022.
In a bid to boost the forex remittances he CBN has rolled-out series of measures to boost forex liquidity include limiting how much banks can hold in foreign currency, capping their net open positions at 20% of shareholders’ funds, and outlawing street-trading of foreign currency.
In line with this, the CBN governor Olayemi Cardoso had earlier stated that all the different measures the bank has taken to boost reserves and create more liquidity in the markets have started to pay off,