Commercial banks in Nigeria groan about Forex scarcity as diaspora remittances hit $60.2 billion in three years

  • Nigerian banks have been hit by currency shortages as the CBN strives to stabilize the naira
  • Visits to most of the commercial banks in Lagos reveal that the banks are running out of $100 notes and are offering their customers $20 notes instead.
  • It comes as report shows Nigerians abroad have transferred more than $60 billion home in the past three years

Nigeria’s commercial banks are groaning over an unprecedented forex crisis that appears to have worsened in recent days as the Central Bank of Nigeria scrambles to shore up the local currency which tumbled to a historic low penultimate week .

Legit.ng checks show that the rarest of these is the US dollar which seems to be in short supply, followed by the British pound.

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Banks in Nigeria, Remittances from the Diaspora
Forex scarcity has hit banks in Nigeria Credit: tommaso79
Source: Getty Images

Visits to some commercial banks in Lagos State show that most of them are running out of US greenbacks and giving excuses to their customers.

No $100 bills

Banks are complaining about the scarcity of $100 notes which are mostly preferred by customers, while customers say lower denominations attract lower rates in the parallel market.

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Customers whose money came through money transfer companies like Western Union and others were unable to access it through banks.

According to people interviewed by Legit.ng, they became frustrated with their inability to access their foreign currency money despite the rebate incentive offered by the Central Bank of Nigeria (CBN) that banks would have to pay 5 naira for every dollar withdrawn by customers.

Nigerians abroad send $60.22 billion in three years

It comes as Nigerians in the Diaspora have remitted $60.22 billion over three years, according to a report by The Punch, which has boosted Nigeria’s economic activities and bolstered external reserves, according to data obtained from the World Bank. and the Budget Office. .

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The World Bank reports that remittances from abroad to Nigeria were estimated at $23.81 billion in 2019.

The Ministry of Finance, Budget and National Planning said diaspora remittances amounted to $17.21 billion in 2020 and $19.2 billion in 2021.

Foreign exchange inflows had dipped below $20 billion once after falling to $19.7 billion in 2016.

The budget office said Nigerians’ remittances abroad were among the main sources of non-oil foreign exchange earnings for Nigeria, explaining that a series of CBN policies were responsible for the increase in inflows. currency in Nigeria last year.

He said Nigeria hoped for an improvement in diaspora remittances in 2022 to reverse the decline in its foreign exchange reserves and improve its balance sheet.

Latest record shows 10 African countries with highest diaspora remittances

Legit.ng reported that Nigerians abroad sent a total of $19.2 billion home in 2022 alone. The World Bank said that in 2022, the outlook for remittances is moderately positive, according to Business Insider.

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The bank released its Migration and Development Brief, indicating growth is expected to continue at 7.0% to $55 billion.

Growth, the World Bank said, despite the generally unfavorable global economic environment.

Source: Legit.ng

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