Augusto predicts rebound in Nigeria’s diaspora remittances to hit $22bn
Nigeria’s diaspora remittances have been projected to recover by five per cent to $22 billion by the end of 2021.
Agusto & Co. Limited, a wholly owned subsidiary of a rating agency, Agusto Consulting Limited, disclosed this in its report titled ‘2021 Nigeria diaspora remittance report & survey’ for May 2021.
The projected remittance is a $1 billion recovery from $21 billion dollars that was remitted in 2020 after a $2 billion decline from $23 billion in 2019 due to the impact of the COVID-19 pandemic and the attendant economic crisis.
The new report was presented by the Managing Director, Yinka Adelekan, and the Head of Consulting, Jimi Ogbobine, during a virtual event on Tuesday.
Part of the report read, “We project that Nigeria’s diaspora remittances will reach $22 billion by 2021, representing a year-on-year (y-o-y) rise of five per cent.
“And then a marginal y-o-y rise of two per cent in 2022 to $22.5 billion.”
Nigeria’s diaspora remittances dropped by 12 per cent to $21 billion in 2020 from about $23.8 billion the prior year, it stated.
The firm described remittances as funds transferred from migrants to their home country, and played important roles in the economy, helping to meet the basic needs of recipients
According to the report, remittances represent household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies.
It said previous studies had shown that about 70 per cent of remittances were used for consumption purposes, while 30 per cent of remittance funds went to investment-related use.
The report said Nigeria’s domestic policy conundrum on foreign exchange was creating many challenges to the wider macro contractions caused by the pandemic.
It said the COVID-19 pandemic created significant global economic ruptures that had affected the rich world and the remittance dependent states.
Due to the crude oil volatility, it stated, the diaspora remittances which had long been Nigeria’s second largest source of foreign exchange inflows had become more significant.
According to the report, Nigerian diaspora remittances are still an under-researched subject despite its strong bankability credentials.
The report said four significant upsides that could lead to favourable outcomes in 2021 included the central bank’s decision to enable recipients of remittances access to funds in foreign currency.
