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Nigeria’s diaspora remittance to hit $34 billion by 2023 – PwC

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PwC, SEC fines PwC over unprofessional conduct , Subsidies gulp N2.3 trillion from FG - PwC 

PricewaterhouseCoopers, a global tax and consulting firm has estimated that migrant remittances to Nigeria could grow to US$34.8 billion by 2023.

According to the report released by the firm, the total remittance flow to Nigeria will grow by almost double from US$18.37 billion in 2019 to US$34.89 billion in 2023.

The breakdown: According to the report, the Sub-Saharan Africa (SSA) region received a small share of the global remittances in 2018, with Nigeria accounting for over a third of the regional inflows. Despite representing a small percentage of global flows, official remittances to SSA grew by 10% ($46 billion) in 2018.

[READ MORE: Presco’s half-year revenue dips by 9.5%]

  • According to the International Monetary Fund (IMF), remittances sent to SSA through informal channels, at 45 to 65% of formal flows, are significantly higher than what was obtainable in other regions.
  • India, China, Mexico, the Philippines and Egypt are among the largest remittance recipients globally, collectively accounting for approximately 36% of total inflows.
  • Egypt and Nigeria account for the largest inflows of remittances in Africa in 2018.
  • In 2017, Nigeria led the Continent in terms of remittance receipts but dropped to second place behind Egypt in 2018.
  • The two main reasons behind this growth are global economic growth, especially in high-income OECD countries and a rise in oil prices, which boosted economic activities in oil-producing countries worldwide.

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Why remittances: Basically, remittances represent household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies. Remittances could be in the form of cash or noncash items that flow through formal channels such as electronic wire, or through informal channels, such as money or goods carried across borders.

Generally, the officially recorded remittances are much lower than the actual remittances that take place through unofficial channels.

[READ MORE: Nigeria ranks 7th country with highest number of internet users in the world]

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Remittances play a great role in economies. The report further shows that remittances help poorer recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses, service debt and essentially, drive economic growth.

Nigeria's Remittance

How Nigeria can harness remittances: According to PwC’s report in order to ensure that remittances are being utilized in ways that are beneficial to the economy, Nigeria must create platforms that increase the accessibility of crucial information for Nigerians in Diaspora.

  • Overall, remittance flows are anticipated to keep expanding. It is therefore imperative that countries in the region, especially Nigeria, take advantage of this trend in the course of strategic economic decision-making.
  • In summary, PwC believes that a coherent policy framework is required to harness remittances into generating capital for productive investments for the growth and development of small and micro-enterprises, which will in turn, create employment.
  • In addition, remittances can be deployed toward philanthropic activities which can serve as solutions to specific deficiencies in the local infrastructure such as schools, hospitals and roads.

[READ MORE: CBN’s Godwin Emefiele, foreign investors meet amidst weak naira]

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Energy

TCN restores collapsed electricity grid

TCN has now restored the electricity grid system which collapsed across the country over the past weekend.

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TCN MD Abdulaziz, four other directors receive appointment letters

The Transmission Company of Nigeria (TCN) has restored the collapsed electricity grid system across the country.

This was disclosed by the Acting Managing Director of TCN, Mr Sule Abdulaziz, during a media briefing on Wednesday.

According to the TCN boss, the system which collapsed on Sunday evening was restored within 40 minutes of the incident.

He said, “The company immediately went into action and stabilised the system in Abuja, before other parts of the country. There is nothing strange but it is normal for a system to collapse and that can happen in any country of the world.

“Since I came on board, we never had any system collapse and this one that happened on Sunday was restored immediately which is the fastest system collapse recovery. We are guarding the grid, we don’t want the system collapse to happen, but when it happens, the most important thing is what was done and how it was done to restore the system.”

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What you need to know

Three days ago, Nairametrics reported that the recent power blackout in the country was due to multiple trippings.

General Manager, Public Affairs, TCN, Ndidi Mbah, who made the announcement through a statement said the company had started the process of restoration to the national grid.

Mbah pointed out that the places that power is yet to be restored were Calabar, Makurdi, Jos, Gombe, Yola, Ugwuaji and Maiduguri axis.

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She stated, “The Transmission Company of Nigeria (TCN) regrets to inform electricity consumers nationwide that at 11:25 am today, the nation’s electricity grid experienced multiple trippings, which led to the collapse of the system.’

“TCN has since commenced grid restoration; power has been successfully restored to every part of the country, except Calabar, Ugwuaji, Markurdi, Jos, Gombe, Yola, and Maiduguri axes. The effort is however ongoing to ensure full restoration nationwide.”

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Energy

N250bn to be spent to fund compressed Natural Gas infrastructure

The CBN is to make available the sum of N250 billion to fund Compressed Natural Gas infrastructure.

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The Central Bank of Nigeria (CBN) is poised to make available the sum of N250 billion to fund Compressed Natural Gas infrastructure.

This move is in a bid to expand gas use and cut reliance on imported fuel, as the government looks forward to offering free conversion to enable some cars run on gas.

It is expected that by 2021, about 1 million cars would have been converted from PMS to Autogas for free.

The National Gas Expansion Programme (NGEP) launched by President Muhammadu Buhari, is part of the country’s effort to free itself of costly gasoline subsidies and conserve the hard-earned foreign reserves from petroleum product imports, making it imperative to focus on gas as an alternative fuel.

(READ MORE: Nigeria to import petroleum products from Niger Republic, sign MoU on transportation, storage)

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What they are saying

According to the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari,

“Select NNPC stations across the country will offer free conversion of ‘some cars’ to enable them to run on liquefied petroleum gas (LPG) or compressed natural gas (CNG). There are currently 80 locations in the country capable of fuelling the vehicles.”

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Bottom line

This is a welcome development as it is cleaner, safer, and affordable to run the cars on gas.

It would also, to a large extent, conserve the foreign reserves being depleted from huge petroleum product imports, as well as offer millions of job opportunities.

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Companies

ABC Transport to raise N1.4 billion through rights issue

ABC Transport Plc has secured the approval of its shareholders to raise additional capital through a rights issue.

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The Board of Directors of ABC Transport Plc has secured the approval of its shareholders to raise additional capital through a rights issue from existing shareholders.

This disclosure was made by the board of ABC Transport in a notification issued by the Company’s Secretary, Onyekachukwu C. Chigbo, after announcing shareholders’ resolutions at its 27th Annual General Meeting (AGM), held on Friday 27th November 2020.

According to the information contained in the notification, the rights issue is N1.4billion, which could be raised via the issuance of shares and debt securities as determined by the Directors of the firm.

However, the rights issue is subject to the approval of regulatory authorities.

What this means

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders the “rights” to purchase new shares at a discount to the market price on a stated future date.

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However, shareholders are not obligated to exercise this right.

In this regard, the company may decide to use the additional capital raised from these offerings to existing shareholders to acquire assets, make a take-over, repay debts or save itself from bankruptcy.

This is expected to strengthen the company’s balance sheet, free up capital for the management to execute revenue, and profit optimizing projects, plans, and strategies.

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What you should know

  • It is important to know that the board decided to raise additional capital after it had secured shareholders’ approval to increase the company’s authorized share capital from N1billion to N2.5billion by the creation of 3billion additional shares of 50 kobo each, ranking pari-passu in all respects with the existing shares in the Company’s equity.
  • In this regard, clause 6 of the Company’s Memorandum of Association and clause 5 of the Articles of Association respectively, will be amended to reflect the increase in the Authorized Share Capital.
  • This amendment will be done by deleting the words, “the authorized Share Capital of the Company is N1billion divided into 2billion ordinary shares of 50 kobo each,” and substituting therewith the words “the authorized Share Capital of the Company is N2.5billion divided into 5billion ordinary shares of 50 kobo each.”

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