Total value of dollar remittances by Nigerians working oversea has surged to $34 billion, a figure that easily surpassed the previous record-high of $25 billion, according to a report.
An online report by news.bitcoin.com, said the despite the surge, a large portion of the funds was still not seem to be entering domestic forex markets that is already constrained. The increase, which has been attributed to the Central Bank of Nigeria (CBN)’s “naira for dollar” incentive scheme, again highlights the growing importance of diaspora remittances to Africa’s most populous country.
An economist with Adedipe Associates Limited, Mr. Biodun Adedipe is quoted to have explained that the CBN’s incentive scheme may well be the reason why the target of $34 billion in annual diaspora remittances was reached two years ahead of schedule.
However, despite this surge in remittance inflows, Nigeria continues to grapple with foreign exchange shortages which in turn has contributed to naira’s continued depreciation as well as the resultant rise in inflation. In attempting to explain why Nigeria is not fully benefiting from the rising remittances, Adedipe points to the fact that a lot of the dollars sent do not find their way to the foreign exchange market in Nigeria.
Adedipe explained: “For example, someone wants to send money to his or her family here in Nigeria, this person, let’s say has $10,000 in the US, and wants to give the naira equivalent to his family member here in Nigeria, ordinarily the way it works in other country is that $10,000 will come into the forex market within Nigeria, and becomes a boost to supply here.