Nigeria’s Diaspora remittances up 5% to $4.3bn in Q1’21, foreign reserves slump


Diaspora remittances rose by five per cent, quarter-on-quarter, QoQ, to $4.3 billion in the first quarter of this year, Q1’21, from $4.1 billion in the preceding quarter, Q4’20.

This may be reflecting the impact of recent measures by the Central Bank of Nigeria (CBN) to boost dollar supply through this channel.

The CBN disclosed this in its statistical bulletin for Q1’21.

However, according to the statistical report on year-on-year, YoY, basis, remittances fell by 23 per cent from $5.6 billion in Q1’2020.

Recall that the CBN in December 2020 introduced measures to boost remittances into the country. These include allowing beneficiaries of diaspora remittance to be paid in foreign currency.

This was followed up with another policy announced in the second quarter of this year tagged Naira4dollar scheme, which involves the CBN paying diaspora Nigerians N5 rebate for every $1 of remittance sent through licensed International Monetary Transfer Operators (IMTOs).

The introduction of the measures followed the 27 per cent YoY decline in remittances to $17.2 billion in 2020 from $23.55 billion due to the severe impact of the COVID-19 pandemic on the incomes of Nigerians living abroad.

Financial Vanguard analysis shows that remittances inflow fell, YoY, in both halves of the year. In the first half of 2020, H1’2020, remittance inflow fell by 23.7 per cent, YoY, from $11.82 billion in H1’2019.

This trend worsened in H2’2020 with remittance inflow falling by 30 per cent, YoY, to $8.2 billion from $11.73 billion in H2’2020.

Further analysis, however, shows an upward trend in remittances inflow in the Q3’2020 and Q4’2020.

After suffering q/q decline of 5.3 per cent to $5.64 billion in Q1’2020, and 40 per cent decline to $3.38 billion in Q2’2020, remittances inflow revived and rose q/q by 15 per cent to $3.89 billion in Q3’2020 and further by 10.6 per cent to $4.1 billion in Q4’2020