Nigeria got a lot of money from people living abroad in 2023. About 35% of all the money sent to Sub-Saharan Africa came to Nigeria.
The World Bank looked at how much money was sent around the world in 2023 and guessed how much would be sent in 2024.
Nigeria received about $19.5 billion last year, which was the most in the region.
“The region saw more money sent mostly because Uganda (15% to $1.4 billion), Rwanda (9.3% to $0.5 billion), Kenya (2.6% to $4.2 billion), and Tanzania (4% to $0.7 billion) got more.
“Even though Nigeria got less money sent (2.9% less), it still got $19.5 billion, which was a big amount.”
Ghana and Kenya also got a lot of money, with $4.6 billion and $4.2 billion, respectively.
On the lower side, Sudan and South Africa each got $1 billion.
The report also showed that money sent by people living abroad is very important for some countries’ economies, like Gambia, Lesotho, Comoros, Liberia, and Cabo Verde. They depend on it to grow.
Money Sent Into Nigeria
According to the report, Nigeria got $19.5 billion in 2023, but it was 2.9% less than the year before.
Even though this is the most in Sub-Saharan Africa, it’s less than what countries like India got, which was about $119 billion.
Most of this money came from the United States, Canada, the United Kingdom, Switzerland, and Italy.
It’s also worth noting that sending money to Sub-Saharan Africa is the most expensive, averaging 7.9% in costs.
These costs include bank charges, money transfer fees, and stamp duties.
Only 10% Goes To Official Banks
While Nigeria gets a lot of money from abroad, only about 10% goes into the official banks.
According to Taiwo Oyedele, who is in charge of tax reforms, most of this money is sent through digital means and doesn’t go into the official banking system. This means it doesn’t help the country’s official foreign exchange pool much.
People send money using apps and parallel market rates, which means the money doesn’t always come as physical dollars.
What The Central Bank Is Doing
Yemi Cardoso, the governor of the Central Bank of Nigeria (CBN), said the bank has created a group to help bring more of this foreign money into official banks.
This group’s goal is to double the amount of money sent in by people living abroad through official channels. They are seeing some success in this effort.
“The CBN knows how much people living abroad send back home and is working to get more of that money into our official system,” Cardoso said.
The World Bank report also acknowledges the CBN’s efforts to improve how money is sent and received in Nigeria.
“The CBN is working to simplify the rules for banks, money transfer operators, and other financial players to bring more money into the country officially,” the report says.
Key Points to Remember:
- Nigeria gets a lot of money from people living abroad, but it still struggles with having enough foreign exchange in its official markets.
- One reason is that not all the money sent in goes through official banking channels, which affects the stability of Nigeria’s currency, the Naira.
- The CBN is working to ensure more of this money goes into the official system to help with liquidity and stabilize the Naira.
- If managed well, money sent by people living abroad could become Nigeria’s biggest source of foreign income, even more than oil.