Direct Forex Remittances To CBN Hit N12trn

Total direct remittances monitored by Central Bank of Nigeria (CBN) between 2010 to 2016 rose to estimated N12.05 trillion ($39.5 billion)..

The data from CBN’s website revealed that as at end of December 2016, total direct remittances to CBN was at N2.13 trillion, an increase of 17 per cent from N1.8 billion in 2015.According to the data, about N1.1 trillion ($3.7 billion) was the highest peak amount remitted in 2016, precisely December 31, 2016.The lowest amount remitted was N26.09 billion ($85.4 billion), while for 2015, total remittance hit the peak of N402 billion ($1.13 billion).The CBN, in 2016, had licensed 11 additional international money transfer operators.Total remittance to CBN in 2014, however, was N2.49 trillion, the highest amount remitted to the apex bank in the six years under consideration, while in 2013, it was at N694 billion, the lowest amount remitted to CBN.Further findings revealed that N1.4 trillion and N1.72 trillion was total amount remitted to CBN in 2012 and 2011 respectively. In addition, N1.78 trillion was the total amount remitted to CBN in 2010.The total direct remittance recorded the highest inflow in 2010 and 2011 with 29 and 25 days of remittance.

The CBN had mandated financial service providers to be duly licensed in order to protect customers and the financial system, adding that international money transfer operators are required to remit foreign currency to their agent banks in Nigeria for disbursement in Naira to beneficiaries.The CBN said that interested applicants should forward their request for licensing under the CBN 2014 Guidelines on International Money Transfer Services in Nigeria.A report by World Bank had disclosed that remittances to developing countries fell for a second consecutive year in 2016, a trend not seen in three decades.According to the World Bank report, an improved global economic outlook, remittances to developing countries are expected to recover this year, growing by an estimated 3.3 per cent to $444 billion in 2017.The report by World Bank noted: “The global average cost of sending $200 remained flat at 7.45 per cent in the first quarter of 2017, although this was significantly higher than the Sustainable Development Goal (SDG) target of three per cent. Sub-Saharan Africa, with an average cost of 9.8 per cent, remains the highest-cost region.

“A major barrier to reducing remittance costs is de-risking by international banks, when they close the bank accounts of money transfer operators, in order to cope with the high regulatory burden aimed at reducing money laundering and financial crime. This has posed a major challenge to the provision and cost of remittance services to certain regions.“Remittance flows to Sub-Saharan Africa declined by an estimated 6.1 per cent to $33 billion in 2016, due to slow economic growth in remittance-sending countries; decline in commodity prices, especially oil, which impacted remittance receiving countries; and diversion of remittances to informal channels due to controlled exchange rate regimes in countries such as Nigeria. Remittances to the region are projected to increase by 3.3 per cent to $34 billion in 2017,” the report added”.