Direct Remittances Decreased By 97.3 Percent In 2020

When the End SARs protest started gathering momentum, Twitter CEO Jack gave his financial support using bitcoin to end police brutality against Nigerian youths. Monetary donations came from within the country and outside the country, with over 62 million naira raised.

The latest data released by the Central Bank of Nigeria showed that direct remittances reduced by 97 percent between January 2020 and September 2020. In January 2020, $2.05billion was remitted to Nigerians but declined over the months, with only $54 million recorded in September.

Remittances represent household income from foreign economies to recipients across borders, cash and non-cash items that flow through formal channels such as electronic wire or informal channels, in terms of money or goods carried across borders. 

Nigerians are known to have the desire to leave the country in search of greener pastures. According to the United Nations, there are over 1.24million Nigerians who have migrated to other foreign nations; this is why money transfers from citizens abroad to Nigerians at home are significant to the country’s development as a developing nation. These funds are used to cater for basic needs like school fees, capital for small businesses, settling of debts, and finance health challenges.

Nigeria accounts for over a third of migrant remittance flows to Sub-Saharan Africa. In 2017, Nigeria’s remittance inflows were also 7.4 times larger than the net official development assistance (foreign aid) received.

The CBN, in an effort to increase remittance inflow and improve the number of channels under which Nigerians in the Diaspora could remit funds, licensed 65 International Money Transfer Operators in 2016. 

But the decrease in the official direct remittances could be due to the increase in informal channels used by citizens. Nigeria is known as the second country in the world that has adopted the use of bitcoin. 

The adoption of bitcoin by Nigerians could be a factor in the decline in official figures of direct remittances as a report from PwC in 2018 estimated that migrant remittances to Nigeria could grow to US$25.5bn, US$29.8bn, and US$34.8bn in 2019, 2021 and 2023 respectively.