World Bank hails CBN eNaira, Naira-4-Dollar Policy, slams high charges for diaspora remittances
Nigerians in diaspora have sent $17.6 billion in 2021 alone , according to the World Bank Group report. The report titled “Recovery Covid-19 Crisis Through A Migration Lens: Migration and Development brief 35” , analysed global trends in migration and remittances as it related to Sustainable Development Goals (SDGs).
Nigeria has shown a significance in growth remittance inflows among countries in Sub-Saharan Africa. According to the report, the country is experiencing a moderate rebound in remittance flows due to the CBN’s novel policies intended to channel inflows through the banking system , and also due to the size of Nigerians in Diaspora.
The migrant base of diasporan Nigerians are an estimated 800,000 persons, with huge concentration in the United states (375,000) and United Kingdom (220,000). And Nigerians are in the top four African Countries with highly skilled workers in the diaspora and this portends a prospectively positive fiscal growth for the country.
World bank also hailed CBN’s eNaira wallet launch and the Naira-4-Dollar policy. “As of mid-November 2021, less than three weeks after its launch, eNaira wallet was reportedly downloaded 566,000 times in 160 countries. Before Nigeria, China and Sweden are among the nota ble countries with their own CBDCs.” The new “Naira-4-Dollar” policy of the Central Bank of Nigeria, launched in March 2021, offers an N 5 reward for every US dollar transferred through the banking system—a policy aimed at shoring up foreign exchange liquidity in the financial system and encouraging Nigerians to use official channels. Moreover, the introduction of the e-naira has attracted substantial attention from financial markets recently.”
The global bank also said that: “ With Nigeria’s substantial adjustment of 2020, there are now signs that recent policy changes may be achieving some traction. For example, an increase in official remittances of 2.5 percent in the first half of 2021 contrasted with the same period of 2020 . An anticipated 7.3 percent increase in remittances during 2022 would carry Nigerian receipts to $19 billion, still well below the average $23 billion .”
The use of cryptocurrencies for remittances in the country was reported to have been hampered by price volatility and regulatory constraints. However, it remains to be seen to what extent Nigeria’s eNaira would become popular for the purposes of sending and receiving international remittances.
The report also noted that among the regions in the world, cost of remittances to Sub Saharan Africa remained particularly high above eight percent. Corridor-specific data reveals that remittance costs tend to be higher when remittances are sent through banks , as is mostly done in Nigeria, instead of through digital channels or through money transmitters offering cash to cash services.