Nigeria launches ‘naira for dollar’ scheme

Nigeria launches ‘naira for dollar’ scheme

The Central Bank of Nigeria has introduced a scheme that would offer a

reward of five naira for every $1 sent by Nigerians living abroad through

international money transfer operators in the country in what it calls “naira for dollar”.

It is a step that shows Nigeria’s reliance on diaspora remittances,

which has dipped over the last year, likely due to the impact of the

Covid-19 pandemic on the earnings of Nigerian migrants.

 

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Diaspora remittances to the country totaled  $25bn (£18m) in 2019 but

dipped to just over $5.3bn in 2020, according to data from the Central Bank of Nigeria.

Nigeria depends on diaspora input to such an extent that in 2018 when

the country recorded $23.5bn in remittances, it was 83% of that year’s budget,

6.1% of the GDP and 11 times higher than the foreign investment flows in

the same period, according to management consultancy firm PricewaterhouseCoopers.

The central bank is targeting at least $2bn monthly in diaspora remittances in 2021,

but a report by the African Growth Initiatives suggests that sub-Saharan

Africa could record a further reduction in remittances by up to $3bn this year.