Nigeria records highest dip in remittance flow

Nigerian in 2020 recorded the highest dip in remittance flow, coming behind Egypt, Morocco, Ghana, Kenya, Senegal and Zimbabwe, during a period COVID-19 pandemic and lockdown which dragged earnings down.

According to a new report by Agusto, in 2020, the country recorded $21 billion in remittance flow, lower than the $23.8 billion and $24 billion recorded in 2019 and 2018 respectively.

The industry researcher also stated that currency depreciation in Nigeria was factored as a solution to the low remittance recorded by Nigeria.

READ ALSO: Blackout worsens as National Grid collapses

Agusto projected in its report that the country’s remittance record will get better this year as recipients of the funds are allowed by the Central Bank of Nigeria to get their funds in foreign currency.

It also stated that the remittance flow will increase as more well-educated Nigerians migrate out of the country. Stimulus packages provided by foreign governments in their countries will also contribute to the rise in capital inflow into Nigeria.

According to Agusto’s head, Jimi Ogbobine, there will be improvement in 2021, as remittance will increase to $22 billion, and $22.5 billion by 2022.

The drop in recorded remittance in the last three years occurred as cryptocurrency became more popular within the country. More Nigerians in the diaspora are using cryptocurrency to send money home in order to avoid high charges and inflation.

READ ALSO: Banks set new transfer limit for domiciliary account holders

The bureau de change association in Nigeria had also warned that cryptocurrency could displace official channels used for sending money to Nigeria if the CBN doesn’t find a way to prevent the digital assets from penetrating further.

Already, the financial regulator has cut links between the banks and cryptocurrency exchanges, but individuals are still conducting crypto transactions through peer-to-peer, in order to avoid CBN clampdown.