Nigeria attracted a total of $109.72 billion foreign exchange in 2020, economic reports obtained from the Central Bank of Nigeria (CBN) has shown.
BizWatch Nigeria’s analyses of the data showed that this represents a 11.9 percent decline on foreign exchange receipts from oil and non-oil sources.
The country recorded a total of foreign exchange inflow of $124.58 billion in 2019, according to the report.
The impact of the COVID-19, containment measures intordiced and global fall in crude oil prices and disruption in global supply chain affected Nigeria’s foreign exchange revenue in 2020.
Other headwinds facing the domestic economy that was recognized by the apex bank are decrease OPEC+ supply cut deal due to low demand for oil, difficulty in inventory adjustments, due to supply chain disruptions, occasioned by restrictions on travels and land border protections; increased fiscal deficits; and several structural rigidities.
These risks, according to the CBN, limited the fiscal space, elevate the vulnerability of the economy to external shocks, as well as retard the recovery potential of growth-inducing sectors.
The economic reports showed that Nigeria attracted $42.71 billion in Q1 2020 before the lockdown, increasing by 21 per cent compared to $35.28billion in the corresponding period in 2019.
Tin Q2 2020, a total of $21.95billion foreign exchange receipts was recorded, declining by 19.36 per cent as against $27.22 billion in the corresponding period of 2019.
The CBN report stated that foreign exchange inflows into the economy totaled $21.46 billion in the Q3 2020, declining by 16.7 percent as against $25.76 billion in the corresponding period in 2019.
Also, in the Q4 2020, foreign exchange inflow into Nigeria declined 35 percent by to $23.6 billion from $36.32 billion in the corresponding period on 2019.
The financial regulator noted that foreign exchange inflow into the economy improved in Q4 2020 compared with the preceeding quarters after the CBN introduced a policy in November 30, 2020, instructing banks to transfer all diaspora remittances to the domiciliary accounts of the beneficiaries or pay the customers in foreign currency.
The CBN also ordered the closure of all naira ledger accounts opened specifically for the purpose of receiving International Money Transfer (foreign transfers from diaspora Nigerians) with immediate effect.
To further shore up Nigeria’s forex reserves, the CBN introduced a ‘Naira 4 Dollar Scheme’ to encourage Diaspora remittances.
The scheme took effect on Monday, March 8, 2021 and will end on Saturday, May 8, 2021.
Under the scheme, all recipients of Diaspora remittances through CBN’s International Money Transfer Operators (IMTO) will be paid N5 for every $1 received as remittance inflow.
The CBN described the initiative as an incentive for both senders and recipients of Diaspora remittances, in the circular signed by the Director, Trade and Exchange Department at CBN, A.S Jibrin.