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Nigeria’s Diaspora Remittances: A Tale of Emigration, Policy and Technology



Money Transfer - Investors King

With $20.1 billion in remittances in 2021, Nigeria was the second-highest recipient in Africa, trailing only Egypt ($28.3 billion). Although Egypt and Nigeria received over half of all remittances to Africa, the rise in inflows into Egypt remained robust, at double digits (16%), while growth in Nigeria slowed to 3%.

Remittances have proven to be positively correlated with the income of immigrants and economic conditions in the sending countries. The slow economic recovery and cost of living crises that confronted many developed economies in 2022 were indicative of this trend and constrained remittance flows into Nigeria.

This was further exacerbated by the implementation of capital controls and other unpopular policies by the Central Bank of Nigeria (CBN), which restricted inflows through official channels.

Remittances from the diaspora have played an increasingly essential role in Nigeria’s economy, serving as an important source of foreign exchange earnings and a catalyst for economic growth and development. As more Nigerians, discouraged by the country’s gloomy economic conditions, look overseas for opportunity, their remittances will continue to play, a crucial role in sustaining the Nigerian economy.

The growth of these funds has been exceptional, empowering dependents to meet their basic needs, pursue education, access healthcare, and embark on entrepreneurial endeavours.

Mass Emigration (Japa Wave) – A double-edged sword

Nigeria has been dealing with the challenge of emigration and brain drain for decades as a result of the rising number of people fleeing in search of greener pastures amid the country’s dim economic prospects. This growing trend in emigration has been informally tagged “Japa” – a Yoruba word that translates to “flee or run away”.

As more countries, particularly highly sought-after destinations, have become more welcoming of immigrants as a result of the global labour shortage experienced post-COVID-19, there are now more opportunities than ever for migrants seeking employment in environments with improved economic and living conditions.

However, this widespread exodus has left many businesses severely understaffed, which has stunted the expansion of a variety of industries and lowered tax revenues for the government. Nonetheless, remittances from the diaspora provide foreign exchange and capital injections to stimulate economic activity.

Remittances are also often utilised to support the livelihoods of dependents back home. Agusto & Co. believes that the surge in emigration witnessed in 2022 is yet to translate to a commensurate rise in remittances as the majority of the emigrants are students who will not be able to fully join the labour force in their host countries until mid-2023.

Increased Channels of Remitting Funds – Surge in Money Transfer Operators (MTO)

In recent years, the rapidly growing global adoption of mobile devices has driven the use of digital technology in remittance services and cross-border payments. COVID-induced movement restrictions have significantly amplified the utilisation of digital money transfer channels. It is estimated that in 2021, following lockdowns and border closures across the world, mobile phone payments spiked by 48%.

Furthermore, there has been a shift to Fintech MTOs, which provide users with a faster, more convenient, and cost-effective remittance experience. Traditional MTOs have begun to adjust to the new normal by building a hybrid structure. Agusto & Co. believes that this structure gives businesses an advantage by allowing them to benefit from the dependability and convenience of physical locations as well as the accessibility of digital solutions by having both a digital presence and a real address.  


Nigeria’s emigrant base is currently skewed towards the economically productive middle-class demographic, which is positive for remittances and underpins the need to devise strategies targeted at this age group to ensure the sustainability of remittances. However, given the significant contribution of students to the emigrating population, Agusto & Co. expects a surge in remittance inflows in the medium term. 

In June 2023, the CBN liberalised the foreign exchange regime, doing away with market segmentation, collapsing all the segments into a single exchange rate window – Investors and Exporters (I & E) Window – and adopted a managed floating exchange rate regime.

We believe that the unification of exchange rates would also incentivise remittance inflows through official channels, particularly for investment purposes, as it is likely to improve the FX liquidity position, which would facilitate the repatriation of funds. Therefore, Agusto & Co. expects remittance flows into Nigeria to rise to about $26 billion by 2025.

This will be supported by improved economic conditions in advanced economies. Given Nigeria’s high poverty rate, which increases reliance on foreign aid, Agusto & Co. also anticipates that the need to finance the basic requirements of dependents to remain the most important element driving remittances in the near to medium term. 

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Banking Sector

CBN Reports 136% Increase in Q1 Forex Inflows Over 2023 Total



Dr. Olayemi Michael Cardoso

The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, announced that foreign exchange (forex) inflows in the first quarter of 2024 were 136% higher than the total inflows recorded in 2023.

This remarkable increase is attributed to recent economic reforms and market liberalization efforts.

Dr. Cardoso made this announcement at the Vanguard Economic Discourse in Lagos on Thursday, an event themed “Reforms in The Era of Global Economic Uncertainties: Whither Nigeria.”

Represented by Blaise Ijebor, Director of Risk at CBN, Cardoso highlighted the bank’s commitment to utilizing all orthodox monetary policy tools to address inflation and enhance market transparency.

“We remain committed to using all the orthodox monetary policy tools available to us to address inflation,” Cardoso stated.

“We have also embarked on major reforms to liberalize the foreign exchange market, which has enhanced transparency, reduced arbitrage opportunities, promoted stability, and improved liquidity.”

One of the pivotal reforms included the settlement of all valid FX forwards, which Cardoso identified as a crucial factor in boosting stakeholder confidence.

This settlement has been instrumental in increasing forex flows into the country. The governor emphasized that the substantial growth in Q1 2024 forex inflows is a direct result of these reforms.

The CBN has taken proactive steps to sanitize and stabilize the forex market. This includes issuing multiple circulars to streamline operations and recently licensing 14 new International Money Transfer Operators (IMTOs) to bolster remittance inflows.

These measures aim to double remittance flows within the year, a target set by the CBN Governor.

“Our target, of course, is to double remittance flows within the year,” Cardoso remarked. “We have started that process to ensure that it happens.”

Cardoso also addressed the broader economic challenges posed by global uncertainties. He noted that global financial tightening has led to increased risk aversion, impacting investment flows into developing economies like Nigeria.

These challenges, coupled with domestic issues such as food inflation driven by rising transport costs, infrastructure constraints, and security concerns, have compounded economic pressures.

“The financial tightening that we have seen globally has been a result of monetary authorities taking steps to rein in inflation,” Cardoso explained. “This has had an impact on developing economies as investments shift to safer markets amidst uncertainties.”

The CBN Governor reaffirmed his commitment to repositioning the bank to deliver sustainable, data-driven solutions aimed at stabilizing the Nigerian economy. He emphasized the importance of collaboration between monetary and fiscal authorities to address the nation’s economic challenges.

“We have embarked on tightening the bank’s monetary policy to address inflationary pressure on the economy,” Cardoso noted. “I believe that the results will become evident in the near term, as we are already seeing a deceleration in inflation.”

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Labour Proposes N497,000 Minimum Wage, Rejects Government’s N57,000 Offer



Nigeria Labour Congress - Investors King

The tripartite committee tasked with reaching a consensus faced a deadlock as labour representatives rejected the government’s proposed offer of N57,000.

Instead, labour unions put forth a counterproposal of N497,000, further complicating the negotiation process.

The meeting, which took place in Abuja on Wednesday, May 22nd, concluded without a resolution, prompting the committee to adjourn until the following Tuesday, May 28th.

Sources privy to the discussions revealed that initial deliberations saw the government maintain its stance on a proposed N54,000 minimum wage, citing financial constraints.

However, following a brief recess, both government officials and representatives from the organised private sector (OPS) revised their offer to N57,000.

Despite this adjustment, labour unions stood firm on their demand for a significantly higher minimum wage, expressing discontent with the proposed figure.

In a surprising move, they presented a counteroffer of N497,000, signaling a wide gap between the two parties’ positions. As a result, the meeting ended without consensus.

Key figures in the negotiations, including Governors Obaseki and Uzodinma as well as Governor Soludo, who participated remotely via Zoom, emphasized the need for the government to demonstrate seriousness in addressing the labour unions’ concerns.

The failure to bridge the divide between labour’s expectations and the government’s offer highlights the complexity of the issue and the urgency of finding a mutually acceptable solution.

Responding to the outcome of the meeting, a senior official from the Nigeria Labour Congress (NLC) expressed disappointment, describing the negotiation process as discouraging.

Despite the government’s modest increase from N54,000 to N57,000, labour unions found the proposal inadequate, resulting in the impasse witnessed during the meeting.

The adjournment of further deliberations to the following week underscores the need for both parties to reassess their positions and explore avenues for compromise.

The minimum wage negotiation process, initiated by President Tinubu through Vice President Kashim Shettima, commenced in January 2024 with the inauguration of the tripartite committee.

Charged with recommending a new minimum wage ahead of the expiration of the current N30,000 wage, the committee comprises representatives from the federal and state governments, the private sector, and organised labour.

Despite early optimism surrounding the committee’s formation, the divergence in proposed minimum wage figures highlights the challenges of addressing the diverse economic realities across different regions of Nigeria.

As the negotiation process enters a critical phase, stakeholders are urged to approach the discussions with openness and flexibility to facilitate a mutually beneficial outcome.

The adjournment of the committee’s meeting underscores the need for constructive dialogue and collaborative efforts to reach a consensus that addresses the concerns of all parties involved.

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Banking Sector

Fidelity Bank Sets N60m Compensation for Chairman, N40m for Non-Executive Directors



fidelity bank - Investors King

Fidelity Bank’s shareholders have approved a substantial compensation package for its chairman and non-executive directors.

The decision, disclosed in a document filed with the Nigeria Exchange Group titled ‘Resolutions from the 36th annual general meeting on Monday,’ outlines the bank’s plans for remuneration for the fiscal year 2024.

According to the resolution, Fidelity Bank’s chairman is set to receive a compensation package of N60 million annually.

Also, each non-executive director is slated to earn N40 million per annum.

The resolution further stipulates that these compensation figures will remain in effect for succeeding years until reviewed by the company during its annual general meeting.

This provision underscores the bank’s commitment to regular evaluation and adjustment of its compensation policies to align with evolving market dynamics and shareholder expectations.

The decision comes amidst Fidelity Bank’s proposal for a final dividend payout of 60 kobo per share to shareholders for the 2023 financial year.

This announcement reflects the bank’s robust financial performance and its commitment to delivering value to shareholders.

Fidelity Bank’s financial report for the year 2023 reveals impressive growth, with profit before income tax soaring by 131.49% to N124.26 billion from N53.68 billion in 2022.

This remarkable performance underscores the bank’s resilience and agility in navigating challenging economic conditions while capitalizing on emerging opportunities in the financial sector.

While the decision to allocate such substantial compensation packages to its leadership team may raise eyebrows among some stakeholders, proponents argue that it is essential to attract and retain top talent in a competitive industry landscape.

They contend that adequately remunerating key personnel is crucial for driving sustainable growth, fostering innovation, and maintaining stakeholder confidence.

However, critics may question the optics of such generous compensation packages, particularly in light of the broader socioeconomic challenges facing the country. With concerns over income inequality and calls for greater corporate accountability, Fidelity Bank may face scrutiny over its executive compensation practices and their alignment with broader societal interests.

As Fidelity Bank forges ahead with its ambitious growth agenda, navigating the delicate balance between rewarding leadership and addressing stakeholder concerns will remain a key priority for the institution.

As the banking industry continues to evolve, ensuring transparency, accountability, and fairness in compensation practices will be essential for maintaining trust and credibility in the eyes of shareholders and the public alike.

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