According to recent data released by the Central Bank of Nigeria (CBN), Nigerians residing abroad sent an impressive $19.8 billion back to their homeland in 2022. This figure marks a slight uptick from the $19.3 billion remitted in 2021. While this 7% increase from the previous year is noteworthy, it still falls short of the peak reached in 2018 when remittances soared to $24 billion.
Economists note that these remittances constitute roughly 5% of Nigeria’s Gross Domestic Product (GDP) and serve as a crucial source of foreign exchange and income for numerous households. The CBN’s data underscores a remarkable resurgence in remittances and highlights the resilience of Nigeria’s diaspora, even in the face of challenges posed by the COVID-19 pandemic.
The data reveals that remittances experienced fluctuations over the past five years. They hit a zenith of $6.3 billion in the fourth quarter of 2018 but plummeted to a low of $3.4 billion in the second quarter of 2020. The decline in 2020 can be attributed to the far-reaching impact of the COVID-19 pandemic, which disrupted global travel and economic activities. Understandably, remittances rebounded in 2021 and continued to rise in 2022 as the world gradually reopened and vaccination rates increased.
While the CBN data doesn’t provide a detailed breakdown by destination, the World Bank’s data indicates that approximately 60% of remittances to Nigeria originate from the United States and the United Kingdom. These two countries host the largest Nigerian diaspora communities, estimated at over 5 million people.
Moreover, the World Bank has disclosed that the Nigerian Diaspora community has contributed a substantial $168.33 billion to the country over the past eight years. According to data from the World Bank and the Budget Office of the Federation, these remittances have played a pivotal role in mitigating the impact of foreign exchange scarcity and have helped bolster Nigeria’s foreign exchange reserves.
As of April 19, 2023, data from the CBN showed that Nigeria’s foreign exchange reserve stood at $34.43 billion, marking an 18.4% increase from the $29.07 billion it held in 2015.
