Whither the substantial remittances?

We see from the CBN’s Quarterly Statistical Bulletin for Q4 2017 that net current transfers amounted to US$5.85bn, their highest since Q4 2013. Our chart shows an annual peak in the fourth quarter, which coincides with the principal holiday season in Nigeria. It also shows a broad dip in these inflows, which consist 95% of workers’ remittances, from mid-2014 through to mid-2017. This correlates with the crude oil price of course but, more significantly, with the economic fundamentals in the leading remittance countries (the US, the UK and Gulf states).                                                                             

  • There is also the possibility that these remittances through official channels picked up once the CBN introduced its fx reforms last year, including the opening of windows with more market-related exchange rates.
  • Economic policy documents in Nigeria and elsewhere routinely identify the diaspora as a target to tap for investment, but generally do not produce a strategy for the task. India and Israel are probably the most effective countries in engaging with their diaspora communities. The FGN did raise US$300m from its maiden diaspora bond in 2017.
  • We can only speculate where remittances to Nigeria are deployed because the recipient institutions (banks and money transfer agencies) are not required to ask for any information of the beneficiaries. If the authorities had this data, they could put together policies and incentives for particular sectors of the economy to boost the diaspora participation in the economy.


Sources: CBN; FBNQuest Capital Research


  • World Bank data released at the start of this week showed an 8.5% increase in remittances to low and middle-income countries in 2017, to US$466bn. India and China topped the list with US$69bn and US$64bn respectively. Nigeria occupied fifth position with US$22bn, which is consistent with the balance-of-payments series in the CBN’s bulletin.

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