COVID1-19: Total direct remittances decline by 50.47% to $1.02bn

…As BVN enrolment hits 41.93m

Due to current global economy challenges caused by COVID-19 and dwindling in global oil prices, Nigeria’s total direct diaspora remittances dropped by 50.47 per cent to $1.02 billion from $2.05 billion between January and February 2020.

This is even as the total number of Bank Verification Numbers (BVN) so far issued by financial service institutions in the country has climbed to 41,926,937 as at June 7, 2020.

The Central Bank of Nigeria (CBN), however, revealed that Nigeria received $19.2 billion in total direct diaspora remittances between January and December of 2019.

The data published by the apex regulator showed that the remittances rose by 70.6 percent when compared to $11.23 billion reported in 2018.

The breakdown of CBN’s total direct remittances revealed that in January 2019, $1.89 billion was remitted, while in February, $1.92 billion was the total direct remittance.

According to the CBN, $1.12 billion and $1.56billion was the total direct remittance between March and April 2019 respectively. Total direct remittance hit $1.74 billion in May; $1.67 billion in June and $1.66 billion in July 2019.

However, for August and September, the apex bank reported $1.66 billion and $1.69 billion respectively was remitted to the nation’s economy. The figures were hovering around $1.35 billion in October and $1.32 billion in November but in December, it increased to $1.59 billion.

The above data revealed that diaspora remittances into the nation’s economy continued to soar amidst a series of foreign exchange reforms that tend to attract inflow of capital.

The CBN had licenced International Money Transfer Operators (IMTO) and monitors legitimate foreign currency, most especially Dollar inflow into the country.

In addition, banks and oil companies also remit foreign currency to the CBN.

Those operators licenced by CBN are TRANS-Fast Remittance, Worldremit Limited, UAE Exchange Centre LLC, Wari Limited, and Home Send S.C.R.L.

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Others are Small World Financial Services Group, Weblink International Limited, Cashpot Limited, DT&T Corporation Limited, Fiem Group LLC, DBA Ping Express, and CP Express Limited.

However, PwC had said remittances from abroad could strengthen Nigeria’s economy with an estimated amount of $25.5 billion, $29.8 billion and $34.8 billion in 2019, 2021 and 2023 respectively.

Data collected from the apex bank’s official website disclosed that diaspora remittances into the nation’s economy continued to soar amidst a series of foreign exchange reforms, which attracted capital inflow.

In 2010, Nigeria received $5.66 billion as direct diaspora remittances. Two years later, there was a dip in the country’s remittances as $2.20 billion remittances were recorded in 2013.

Direct remittances inflow picked in 2014, as Nigeria received a total of $8.15 billion.

Fast forward to 2018, direct remittances rose to $17.57 billion. This implies that direct remittances inflow into Nigeria rose by 210.3per cent in a decade.

Meanwhile, the latest update on BVN by the Nigeria Inter-Bank Settlement System Plc (NIBSS) posted on its website revealed that 58 percent of the total 79.4 million as at January active bank account holders are yet to register on BVN exercise of the CBN.

Active bank accounts linked to BVN stood at 41.82 million in May, the NIBSS had disclosed.

According to market analysts, the rise in the number of new account opening and enrollment on BVN platform by bank customers can be attributable to the increasing number of customers opening new accounts and those regularising delinquent accounts following the challenges they faced during the lockdown in Lagos, Ogun and Federal Capital Territory (FCT), Abuja.

Crowds in banks’ branches have continued to increase several weeks after the lockdown was partially lifted, with the majority of the people wanting to open new bank accounts, activate their Automated Teller Machine (ATM) cards and lodged complaints about failed transactions, among others.

The current BVN data falls short of the CBN’s target of 100 customers’ enrollment on the BVN network in the next five years, but was an improvement from about 36 million captured in the last one year.

The Governor, CBN, Godwin Emefiele, in his outlined vision and policy thrust for the next five years last year said: “In order to ease the constraint poor identification has on the availability of credit to prospective banking customers, the CBN will support an aggressive enrollment of prospective banking customers in the informal sector onto the BVN system.

“The current enrollment of 38 million unique banking customers will be expanded to 100 million over the next 5 years. An ongoing partnership with NIMC will also enable integration between the two databases.

“This effort will improve the comfort level of banks in providing services to an expanded customer base. It will also aid in the development of a credit profile for banking customers, which will assist in improving access to credit for creditworthy borrowers by banks.”

Meanwhile, industry observers have pointed out that the figure issued by NIBSS revealed the numerous banks’ customers are yet to comply with BVN mandate of the Central Bank of Nigeria (CBN).

To address this challenge and complement the existing means of identification of customers, which include: the Driver’s Licence, the International Passport, the National Identity Card, and the Permanent Voter’s Card, the CBN, in collaboration with the Bankers’ Committee, launched the Bank Verification Number (BVN) Project in February 2014.

The BVN is expected to also minimise the incidence of fraud and money laundering in the financial system, as well as enhance financial inclusion.

The implementation of the BVN initiative, which started with the customers of Deposit Money Banks (DMBs), has been very successful.