Panafrican News Agency

Nigerian diaspora remittances set a new record in 2018 at $25bn

Dakar, Senegal (PANA) - Remittances from the Nigerian Diaspora broke a new record in 2018, rising to $25 billion from $22 billion in 2017, according to the PricewaterhouseCoopers audit firm's report on the country.

Nigeria is by far the leading African country in diaspora remittances. 

This amount, which represents 6.1 pc of Nigeria's GDP, is far higher than the official Development Assistance (ODA) received by the country in 2017 estimated at $3.3 billion.

At the same time, foreign direct investment (FDI) fell by 36 pc compared to 2017.

Diaspora remittances to Nigeria are a breath of fresh air for the country whose economy is essentially dependent on oil export revenues of 90 pc. However, in recent years, due to the drastic drop in oil prices, the country has recorded significant capital losses.

The report indicates that the oil production curve continues to fall below the central government's average target of 2 million barrels per day.

In addition, the Organization of Petroleum Exporting Countries (OPEC) has reduced Nigeria's oil production level to 1.685 million barrels per day.

The reduction in production and fluctuations in oil prices will have an impact on budget implementation in 2019. There are also risks of production disruptions related to attacks on oil production platforms by armed groups that will contribute to the decline in oil revenues.

This deleterious situation has had an impact on the level of economic growth, which has not been able to exceed the 2 pc threshold for three years.

From 1.5 pcs in 2017, it was estimated at 1.9 pcs in 2018. This weak recovery in economic growth does not allow the country's needs to be met. The decline in oil revenues led to a deterioration in the deficit to 3 pc in 2018.

On the basis of these data, the report estimates that the debt-service-to-revenue ratio is increasing faster than the 31 pc forecast in the budget. "We expect the deficit to be financed by an increase in domestic bond issuance."

In addition, the report highlights the volatility of the naira, the local currency, which has experienced a significant decline.

"In 2018, the Central Bank of Nigeria increased its injections of dollars into the foreign exchange market by 87 pc to US$40 billion".

The situation, which has improved significantly, is expected to deteriorate in the face of sustained pressure from demand for dollars.

"Towards the end of 2019, it could lead to a depreciation, which could range from about 390 to 415 naira to the dollar, while the current rate is about 360 naira to the dollar," the report said.
-0- PANA OG/JSG/MTA/MA 7March2019