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Remittances to Nigeria to hit $21bn by year end

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LAGOS-The World Bank Group has projected that Nigeria will in 2014 receive an inflow of $21 billion as remittances from Nigerians living and working abroad. This figure will place Nigeria as the top receipt of foreign remittance in Africa. Nigeria will be followed by Egypt with a projected remittance of $18 billion.

This fact is contained in a release by the World Bank Group on” Migration and Remittances: Recent Developments and Outlook; Special Topic: Forced Migration “.According to the report “Remittances to developing countries are projected to grow by 5.0 per cent to reach $435 billion in 2014 accelerating from the 3.4 per cent expansion of 2013, and rise further by 4.4 per cent to $454 billion in 2015.In 2013, remittances were more than three times larger than ODA and, excluding China, significantly exceeded foreign direct investment flows to developing countries.

Growth of remittances in 2014 is being led by three regions: East Asia and the Pacific, South Asia, and Latin America and the Caribbean. “OfficDOLLARSially recorded remittance flows to developing countries are projected to reach $435 billion in 2014, 5.0 per cent higher than last year (Figure 1.1 and Table 1.1).

The growth in remittances is expected to moderate to 4.4 percent in 2015, raising flows to US$454 billion. This outlook is based largely on lower projected GDP growth rates in key remittance-sending countries. Global remittance flows, including flows to higher-income countries, are expected to follow a similar pattern, rising from US$582 billion in 2014 to US$608 billion in 2015.

“Remittances are an essential source of external funds for developing countries. These flows were three times larger than official development assistance in 2013, and are steadier than both private debt and portfolio equity.Remittance flows are significantly larger than total foreign direct investment to developing countries, excluding China.

They are also a more stable component of receipts in the current account, reliably bringing in foreign currency that helps sustain the balance of payments and dampen gyrations “The global average cost of sending remittances continued its downward trend in the third quarter of 2014, falling to 7.9 percent of the value sent, compared to 8.9 percent a year earlier.

Competition and the expansion of mobile-phone and internet-based technologies hold much potential to continue driving down fees. Risk-based approaches to the application of anti-money laundering regulations to remittance operators and international banks hosting their bank accounts will be important to ensuring that compliance does not result in undue costs, which could slow the fall in remittance costs and leave substantial flows underground.

The report said “With over 14 million people born in India living abroad in 2013 (estimated to be the largest emigrant stock in the world), India is projected to remain the largest recipient of officially recorded remittance inflows, which may reach $71 billion in 2014. Other countries expected to receive large remittances in 2014 include China $64 billion, the Philippines $28 billion, Mexico $24 billion, Nigeria $21 billion, and Egypt $18 billion”.

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Business

Nigeria pays US$4.9 billion on petrol subsidy in 2024- NNPCL

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies. 

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Yemie ADEOYE

INSPITE of the official position of the Nigerian government that the controversial petrol subsidy is gone for good as announced by the President on assumption of office, the state owned Nigerian National Petroleum Corporation Limited, NNPCL has disclosed that petrol subsidy is still fully operational in Nigeria, although, under a different identity.

Umar Ajiya, Chief Financial Officer at the NNPCL, disclosed that it cost the company a staggering N7.8 trillion (US$4.9) to cover this price gap in the first seven months of 2024.

Rather than simply referring to these claims as subsidies, he stated that the company is merely managing the price difference in petrol imports on behalf of the federation, stressing that this should not be misconstrued as a return to subsidy payments.

This revelation has reignited discussions on whether the NNPC is indirectly offering subsidies, a concept typically defined as selling a product below its cost price.

Documents reviewed by Biztellers.com.ng showed that the term “subsidy” was used extensively in official correspondence between the NNPCL and the presidency, particularly in reference to the “shortfall.”

Recall that President Bola Tinubu reportedly approved NNPC’s request to utilize the 2023 final dividends due to the federation to offset these costs.

However, during a media briefing on Monday about the company’s 2023 audited financial statements, Ajiya refuted claims that the NNPC is involved in any subsidy scheme.

Ajiya further disclosed that the Nigerian government owes the NNPC N7.8 trillion ($4.9 billion) in subsidy-related debts for the period from January to July 2024.

In furtherance of his clarification to the News Agency of Nigeria (NAN), Ajiya insisted that no subsidy payments have been made to any marketer in the last nine years, citing the NNPC’s role as the sole importer of petrol under supply contracts.

He said, “In the last eight to nine years, NNPC Ltd. has not paid anyone a dime as a subsidy; no kobo has been disbursed by NNPC Ltd. in the name of subsidy. No marketer has received any payment from us for subsidy.”

“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall.

“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”

Ajiya remained silent on how much of the $4.9 billion could have been remitted to the federation account if the NNPC had not been covering the “shortfall.”

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.

 

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Banking

CBN Denies Currency Devaluation

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CBN Pegs Interest Rate at 14%

 

The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.

 

Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.

 

However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.

 

In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.

 

However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’

 

“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.

 

“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.

 

He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.

 

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Banking

BREAKING: CBN Increases Interest Rate By 0.5%

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CBN Pegs Interest Rate at 14%

 

The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.

 

The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.

 

Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting,  thereafter.

 

While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.

 

In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.

 

Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”

 

Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.

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