Remittances for July 2024 Surge 130% to $553 Million

The Central Bank of Nigeria (CBN) has announced that remittance inflows in July 2024 surged to a record $553 million.

This represents a 130% increase compared to the corresponding period in 2023, making it the highest monthly inflow ever recorded.

The CBN attributed the unprecedented growth to the successful implementation of strategic policy measures aimed at boosting liquidity in Nigeria’s foreign exchange market.

In a statement signed by Hakama Sidi-Ali, acting director of corporate communications at the CBN, the bank credited the spike in remittances to recent reforms, including the licensing of new International Money Transfer Operators (IMTOs), the adoption of a willing buyer-willing seller model, and facilitating quicker access to naira liquidity for IMTOs.

“These policy changes have been instrumental in driving remittance inflows to record levels,” Sidi-Ali stated. “We have taken strategic steps to build public confidence in the foreign exchange market, which has resulted in greater remittance flows.”

Remittances, which serve as a vital source of foreign exchange for Nigeria, have long supplemented foreign direct investment and portfolio investments.

The increase in inflows is a reflection of ongoing efforts by the CBN to create a more robust and inclusive banking system, which is crucial for the overall health of the Nigerian economy.

In its mission to further stabilize the foreign exchange market, the CBN has made it a priority to double formal remittance receipts within the next year.

The recent data suggests that these goals are within reach. By offering improved liquidity to IMTOs and simplifying the transfer process, the apex bank has effectively incentivized more Nigerians living abroad to remit funds through formal channels.

The record-breaking inflows come as Nigeria battles economic challenges, including inflation and rising borrowing costs. However, recent statistics from the National Bureau of Statistics (NBS) offer a glimmer of hope.

For the first time in 19 months, Nigeria’s year-on-year headline inflation rate slowed in July 2024, indicating that the CBN’s monetary policy tightening measures are beginning to deliver results.

Increased remittances are expected to further stabilize the foreign exchange market, which has been under pressure in recent years due to global economic uncertainties and fluctuating oil prices.

CBN officials anticipate that as remittance flows continue to grow, they will help to cushion the impact of these external shocks, ensuring greater stability in Nigeria’s currency markets.

Beyond the immediate benefits of increased liquidity, the CBN also views this surge in remittances as part of its broader objective of promoting sustained economic growth and price stability.

The central bank has reiterated its commitment to closely monitoring market conditions and making policy adjustments as necessary to maintain this upward trajectory in remittance inflows.

With remittances now reaching historic levels, Nigeria’s economy is poised to benefit from an inflow of foreign currency that can be channeled into development projects, infrastructure investments, and support for small and medium-sized enterprises.

This boost could be a game-changer for the Nigerian economy, providing much-needed financial stability and supporting growth amid ongoing global economic challenges.