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Nigeria Receives $19.5bn in Diaspora Remittances in 2023

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diaspora remittances

By Adedapo Adesanya

Nigeria emerged as a prominent beneficiary of diaspora remittances in Sub-Saharan Africa, accounting for over 35 per cent of total inflows in 2023, totalling nearly $19.5 billion.

This is according to a World Bank analysis that examines global remittances in 2023 and forecasts inflows for 2024.

The survey stated that Nigeria received the greatest influx in the area last year but recorded a drop of 2.9 per cent to $20.5 billion in 2022.

“Remittances to Nigeria, accounting for around 35% of total remittance inflows to the region, decreased by 2.9% to $19.5 billion,” the report said.

Ghana and Kenya are also significant recipients of remittances, with inflows of $4.6 billion and $4.2 billion, respectively.

“The regional growth In remittances in 2023 was largely driven by strong remittance growth in Uganda (15% to $1.4 billion), Rwanda (9.3% to $0.5 billion), Kenya (2.6% to $4.2 billion), and Tanzania (4% to $0.7 billion),” the report noted.

Sudan and South Africa, which together receive $1 billion in remittances, are at the bottom of the list of the ten countries with the highest inflows.

The report also shows that remittances from the diaspora account for one-fifth of the GDP in countries like Gambia, Lesotho, Comoros, Liberia, and Cape Verde, all of which heavily rely on these inflows for their economic development.

The report also shows that these remittances came mainly from countries such as the United States and Canada as well as from the United Kingdom, Switzerland, and Italy.

It is also important to note that Sub-Saharan Africa has the highest remittance cost with an average of 7.9 per cent compared to other regions.

These remittance costs include payments such as bank charges, money transfer operator’s percentage as well as stamp duties, among others.

Even with the massive influx of foreign cash brought in by Nigerians abroad, the nation continues to face severe liquidity issues in its foreign exchange market.

However, recent policy thrusts from the Central Bank of Nigeria (CBN), have created a structure that will let the inflows from diaspora be recognised in the official foreign exchange market, which might help reduce the currency volatility that has led to the naira’s decline.

Recall the Governor of the CBN, Mr Yemi Cardoso, said the country recorded a total foreign exchange inflow of about $24 billion in the first quarter of 2024.

“In terms of liquidity, especially on the foreign exchange side, we have seen an increase. The first quarter of this year has resulted in a total inflow of about $24bn. Now, this is almost about 40 to 50 per cent more than the quarters up to about 2021,” he said.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

Crude Oil Down on Steady US Energy Demand Forecast

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Crude Oil Loan Facility

By Adedapo Adesanya

Crude oil went down on Tuesday after a projection showed steady demand in the world’s largest oil producer, the United States, for 2025, Brent futures declining by $1.09 or 1.35 per cent to settle at $79.92 a barrel and the US West Texas Intermediate (WTI) crude losing $1.32 or 1.67 per cent to finish at $77.50 a barrel.

On Tuesday, the US Energy Information Administration said the country’s oil demand would remain steady at 20.5 million barrels per day in 2025 and 2026, with domestic oil output rising to 13.55 million barrels per day, an increase from the agency’s previous forecast of 13.52 million barrels per day for this year.

Also, the oil market shrank a few days after prices gained following new US sanctions on Russian oil exports to India and China.

On Monday, prices jumped 2 per cent after the US Treasury Department on Friday imposed sanctions on Gazprom Neft and Surgutneftegas as well as 183 vessels that transport oil as part of Russia’s so-called shadow fleet of tankers.

Analysts say this move could have a significant price impact on Russian oil supplies from the fresh sanctions, however, their effect on the physical market could be less pronounced than what the affected volumes might suggest.

ING analysts estimated the new sanctions had the potential to erase the entire 700,000 barrels per day surplus they had forecast for this year, but said the real impact could be lower.

Uncertainty about demand from China, the world’s largest oil importer, could impact tighter supply this year.

China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic, official data showed on Monday.

Meanwhile, the American Petroleum Institute (API) estimated that crude oil inventories in the US fell by 2.6 million barrels for the week ending January 10.

For the week prior, the API reported a draw of 4.022 million barrels in US crude oil inventories amid build season, while product inventories saw a hefty build.

In 2024, crude oil inventories dropped by more than 12 million barrels, according to the API’s inventory data. In the first few weeks of 2025, crude inventories have shed more than 6.6 million barrels.

Official data from the US EIA will be due later on Wednesday, confirming the actual level of stockpiles.

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Economy

Stock Exchange Suffers Heavy Loss as Investors Pull Out N1.1trn

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Local Stock Exchange

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited came under heavy selling pressure on Tuesday, going down by 1.66 per cent as investors embarked on profit-taking after most stocks on the trading platform gained in the past few trading sessions.

It was observed that the industrial goods sector was the most affected yesterday as it went down by 4.99 per cent due to the decline suffered by Dangote Cement and others.

The insurance continued its downward trend during the day as it lost 2.80 per cent, the consumer goods counter fell by 0.27 per cent, and the banking index shed 0.10 per cent, while the energy sector appreciated by 0.29 per cent.

At the close of business, the All-Share Index (ASI) deflated by 1,745.16 points to settle at 103,622.09 points compared with the previous trading day’s 105,367.25 points and the market capitalisation moderated by N1.1 trillion to finish at N63.188 trillion versus Monday’s N64.252 trillion.

Business Post reports that investor sentiment remained weak on Tuesday after the bourse ended with 41 depreciating equities and 23 appreciating equities, representing a negative market breadth index.

Honeywell Flour lost 10.00 per cent to trade at N9.54, Dangote Cement declined by 9.98 per cent to N431.00, Julius Berger crashed by 9.98 per cent to N139.80, Sovereign Trust Insurance decreased by 9.68 per cent to N1.12, and Prestige Assurance tumbled by 9.30 per cent to N1.17.

On the flip side, Northern Nigerian Flour Mills appreciated by 10.00 per cent to N45.10, Livestock Feeds grew by 9.91 per cent to N6.10, Academy Press expanded by 9.90 per cent to N3.22, University Press increased by 9.82 per cent to N4.81, and Neimeth gained 9.76 per cent to quote at N3.15.

During the session, market participants bought and sold 503.3 million shares valued at N12.6 billion in 12,900 deals compared with the 505.8 million shares worth N8.1 billion traded in 14,259 deals a day earlier, indicating a rise in the trading value by 55.56 per cent and a drop in the trading volume and number of deals by 0.49 per cent and 9.53 per cent, respectively.

The most active stock for the session was GTCO with 54.4 million units worth N3.2 billion, Nigerian Breweries transacted 32.2 million units for N1.0 billion, Universal Insurance traded 30.8 million units valued at N22.6 million, AIICO Insurance exchanged 26.6 million units worth N47.2 million, and Chams transacted 20.0 million units valued at N40.9 million.

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Economy

FG Offers 18% Interest on Savings Bonds

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FGN Savings Bonds

By Adedapo Adesanya

The federal government is offering two new savings bonds with interest rates between 17 and 18 per cent through the Debt Management Office (DMO).

In a statement by the agency, the country said retail investors can purchase the two-year bond maturing in January 2027 at 17.23 per cent interest, while the three-year paper maturing in January 2028 at a coupon rate of 18.23 per cent.

Bonds are very safe financial instrument that serve as investments because they are backed by the federal government, which promises to pay back the money.

According to the DMO, people can buy these bonds starting January 13, 2025, until January 17, 2025, with allotment expected on January 22, 2025, and the interest to be paid to investors every three months – in April, July, October, and January.

These bonds have some special features. They are tax-free under both company and personal tax laws.

Big investors like pension funds and trustees are allowed to buy them and each bond costs N1,000 each.

However, interested investor can only  buy at least N5,000 worth, and can’t buy more than N50 million.

This comes after the Ms Patience Oniha-led debt office said the Nigerian government was offering three bonds worth N150 billion in September 2024.

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