CBN Clarifies Diaspora Remittances to Nigeria, Inflow Currently at $2.6 billion

Oyo dismisses misconceptions over apex bank’s N7.6bn loan

The Central Bank of Nigeria (CBN) has clarified the official value of diaspora remittances to the country, saying the total inflows from Nigerians living abroad is $2.6 billion and not $26 billion, as being quoted in some quarters.

The clarification followed reports that huge diaspora dollar inflows into the country, estimated to be about $26 billion, had not really impacted positively on the economy.

Meanwhile, the Oyo State government said Governor Seyi Makinde had decided to spend the N7.6 billion loan his predecessor secured from the CBN on the reconstruction and standardization of farm settlements in Eruwa and Akufo areas of Ibadan, the state capital. This was contained in a statement by the governor’s Chief Press Secretary, Taiwo Adisa.

A former Minister of Finance from 1993 to 1998, Anthony Ani, had queried the huge sum alleged to be missing through diaspora remittances in an article published in a national daily (not THISDAY). In the article, he alluded to alleged abuses identified by another columnist, Henry Boyo.

Ani, who suspected massive foreign exchange laundering in banks, said, “When in 1995 we at the Ministry of Finance reviewed the country’s sources of foreign revenues, we found out that nothing was coming in from Nigerians in the Diaspora, whereas India and Jamaica were living on foreign exchange from their citizens abroad.
“When I enquired why Western Union and MoneyGram could not receive money from Nigerians abroad, I was told that it was due to our tax laws.”

This development, he said, necessitated the change in the Nigerian tax laws to accommodate those in the diaspora. He added that since the new tax law, remittances from diaspora had increased exponentially since 1996.

Frowning on recent developments, Ani said, “The fact is that the Diaspora remittances are not retained in Nigeria and there is a collaboration between the CBN, Nigerian banks and Western Union/MoneyGram; in such an event, government must investigate the infraction, punish the money launders, and recover all past Diaspora remittances retained abroad!”
But dismissing the representations as fraught with inaccuracies, the apex bank explained that people appeared to have misrepresented the transactions that constituted diaspora remittances.

CBN Director, Corporate Communications Department, Mr. Isaac Okoroafor, queried the sources of the data being referenced by critics. According to him, the data, purported to be from the World Bank had also been queried by the Monetary Policy Committee (MPC) of the CBN, as it did not reflect the actual amount of inflows from Nigerians living abroad.

“We are looking for the so-called $26 billion diaspora cash. because such cash will impact positively on our reserve.” He chuckled at those bandying the figures about.

He said understanding the methodology through which the data was sourced could provide an insight into why critics’ diaspora figures might be off the target.

Okoroafor said instances of inaccurate statistics on the country further lent credence to the call by President Muhammadu Buhari for a homegrown data.

The president had recently faulted the statistics produced on the country by the International Monetary Fund (IMF) and the World Bank bodies, describing them as wild estimates.

“Sometimes I agree with President Buhari that people keep bandying wrong data around,” the CBN spokesman said.
Recall that the IMF and the World Bank recently churned out data suggesting structural weaknesses in the Nigerian economy and the need for government to activate urgent reforms.
Okoroafor noted that the foreign bodies had often admitted to the fact that their narratives were somewhat faulty and “are always ready to correct their mistakes.”

Clarifying the status of the inflows from Nigerians living abroad, the CBN director said, “Their calculation of remittances include data from inward official sources like Western Union, money being brought home by diasporas coming home for any function, money being exchanged by diasporas with Nigerians at home, for example, my brother is in the USA, wants to send money home but has a friend in Lagos.

“That friend in Lagos wants a shoe from Harrodsburg. The friend in London uses his credit to buy the shoe in Harris’, sends it to Lagos and tells the guy in Lagos to give the naira equivalent to the diaspora’s relative in Lagos.

“Also, you have a businessman in Lagos, who wants to buy goods from China. He contacts his associates in China; that associate in China wants him to get him gum Arabic from Nigeria. The guy in Nigeria buys the gum Arabic from Kano, ships it to China and the guy in China buys textiles in China and sends it to Kano. That is also a remittance.

“Now, when the World Bank sums up the dollar value of these activities, they say we receive remittances of $26 billion. I’m disappointed that enlightened people could now say remittances is $26 billion, giving an impression as if CBN has it in its pocket.”
It is not the first time the federal government would be calling data from foreign bodies to question. Recently, the government and the World Bank differed on the spending on social safety net in Nigeria.

The bank had advised the federal government to increase its budget for social safety net programme in order to have a significant impact on poverty alleviation. It claimed the country’s current investment in social safety nets was about 0.3 per cent of Gross Domestic Product (GDP) and that this was well below the regional average of 1.06 per cent of GDP.
The bank, specifically, noted that financing of social protection programmes in the country had remained a challenge, as the government has mainly relied on funding support from development partners to implement the scheme.

But reacting to the assertions by the Bretton Woods institution during the launch of the Africa Social Safety Nets Report in Abuja, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had promptly queried the veracity of the report.

The minister, who launched the World Bank report, differed with the bank on the funding status of its social investment programmes, arguing that the publication failed to take into account some government intervention efforts aimed at poverty reduction.

Ahmed said, “Future reports in respect of Nigeria should take into account the complete remit of what we do in terms of social safety. It is not just the social investment programmes that is the social programmes in this country, we have always had pensions, we have always had health insurance, we have always had disability insurance programmes and several other programmes that other countries put together and highlight.”

In the meantime, Oyo State government said a loan of N7.6 billion secured from the CBN by the previous government would be used to reconstruct and standardize farm settlements in Eruwa and Akufo areas of Ibadan.

A statement by the governor’s Chief Press Secretary said, “In effect, the decision by Engineer Makinde to stall the access of Ajimobi’s government to the N7.6 billion was not only well-considered but completely in the interest of the people of Oyo state.
“As the governor of Oyo State, Engineer Makinde had taken his time to x-ray the best way the loan can be applied in view of the four-point Service Agenda of his administration.

“He has, therefore, come to the inspired decision to devote the said loan to the reconstruction and standardization of the farm settlements in Eruwa and Akufo areas of Ibadan.”

The statement said the two farm settlements were to be built into farm estates in line with the vision of the Makinde administration to ensure the full utilization of the agriculture value chain for economic expansion and to boost Internally Generated Revenue (IGR).
“It is expected that when the two farm estates fully come on stream, the output therefrom would easily offset the loan secured while also providing the seed money for the reconstruction of the remaining seven farm settlements,” it stated.
The statement also clarified what it called misinformation around the loan, saying it is an attempt to colour the truth to confuse the unsuspecting public.

It said, “The misconceptions and misinformation that Governor Makinde was going for a loan of N7.6 billion is a deliberate attempt to colour the truth and it is an indication of a political move by certain commentators, who are exhibiting apparent amnesia on the matter.

“Governor Makinde is not seeking a fresh loan. The action that was taken by the House of Assembly of Oyo State on Thursday was to give the legislative nod to the state government to access the fund that had already been domiciled with the government since the days of ex-governor Ajimobi.”