Boost For Naira as Nigerians Abroad Send $365 Million Home in One Month to Boost Economy

Boost For Naira as Nigerians Abroad Send $365 Million Home in One Month to Boost Economy

  • Nigeria has witnessed a boost in dollar supply from Nigerians living abroad, with remittances rising to 80% in May 2024
  • The total amount recorded in diaspora remittances for May is about $365 million, the highest this year
  • The development comes amid a rise in foreign exchange turnover in the FX market, where the naira traded high against the dollar

Data from the Central Bank of Nigeria has revealed that the total foreign remittances for May 2024 amounted to $365 million, an 80% yearly increase compared to the May 2023 figure of $203.89 million.

Analysts say the rise in foreign remittances is a crucial source of FX earnings for the Nigerian economy.

Nigeria experiences a surge in dollar supply, CBN
More dollars pour in from Nigerians abroad as the naira rises in value Credit: Picture Alliance/Contributor
Source: Getty Images

Remittance to boost the naira's performance

Further analysis of the data also indicates that in the first five months of 2024, Nigeria received about $841.37 million in diaspora remittances.

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In January, Nigeria's diaspora remittances hit $138.56 million and dipped in February to $39.14 million, showing seasonal variations in remittances.

In March this year, diaspora remittances climbed to $104.9 million, showing a rebound in the flow of funds. The trend continued into April, with $193.31 million in diaspora remittances.

May recorded the highest increase in diaspora remittance at $365.44 million, the highest monthly figure this year.

CBN moves to boost remittances with new licenses

Market watchers say this increase in May 2024 could be due to several factors, including economic conditions where diaspora Nigerians live and enhanced remittance channels.

The CBN recently granted licenses to 14 new international money transfer operators (IMTOs) to double remittances into the country.

Reports say the CBN governor, Olayemi Cardoso, disclosed that the new licenses are expected to boost competition and lower the cost of transactions, attracting more remittances via formal avenues.

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Forex turnover rises in FX market

According to the CBN boss, the apex bank has identified an important element of the inflows into the country, saying it is about six percent of Nigeria’s GDP.

The development comes as forex turnover in the Nigerian FX market surged to 139.67% on Tuesday, June 11, 2024, to hit $373.97 million.

The turnover at NAFEM boosted the naira’s performance against the US dollar, which appreciated to trade at N1,473.66 per dollar.

The rise in FX supply indicates renewed confidence in the market, which has shifted market sentiments.

Nigerians abroad send home $282m in three months earlier reported that Nigeria recorded $282.61 million as direct forex remittances in the first quarter of 2024.

The information was obtained from the Central Bank of Nigeria’s (CBN) website on Monday, May 13, 2024.

Forex remittance is the money transferred from Nigerians abroad to family or other individuals.

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Pascal Oparada avatar

Pascal Oparada (Business editor) Pascal Oparada is a Mass Communications Graduate from Yaba College of Technology with over 10 years of experience in journalism. He has worked in reputable media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner.