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Business News

More pressure on the naira as Diaspora remittances to drop by 20%

A Pan-African credit rating agency has predicted that diaspora remittances for this year are going to witness a 20% decline from last year’s figure.

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More pressure on the naira as Diaspora remittances to drop by 20%

The coronavirus disease (COVID-19) has become a unique global pandemic which has created a lot of fear in governments and business owners, as there is limited knowledge of the spread, prevention, treatment, containment and the long term effect of the virus.

This has led to an unprecedented lockdown with its crippling effects on the global economy. The lockdown and movement restrictions in major economies have led to low demand, crash in crude oil prices, amongst other downturns. The low crude oil prices have seen Nigeria’s foreign exchange earnings drop drastically with the depleting external reserve.

A Pan-African credit rating agency, in its report titled, ‘COVID-19 in Nigeria: Economic Perspectives and Mitigating the Risks’, has predicted that diaspora remittances for this year are going to witness a 20% decline from last year’s figure.

In absolute terms, the rating agency said that diaspora remittances would drop from the $25 billion that was achieved last year to $20 billion this year.

[READ MORE: Nigeria receives $17.5 billion diaspora remittances in 2019)

The report said, “Our prognosis also indicates that with an economic crisis in several western nations, Nigeria could see a slowdown for the first time in over a decade in workers’ remittances.

‘’We are forecasting a 20% drop in the diaspora remittances to $20 billion from $25 billion in the prior year further placing the naira under strain.”

The expected drop in diaspora remittances can be attributed to lockdowns and disruptions in economic activities globally with its adverse effect on the income of businesses and households. This will, for the first time in over a decade, have a negative effect on workers’ remittances to the country.

The decrease or slowdown in diaspora remittances will put further pressure on the country’s external reserve and the Naira.

Recall that the Central Bank of Nigeria (CBN), in reaction to low foreign exchange inflow and declining external reserve, devalued the official exchange rate from N305 per dollar to N360 per dollar and then merge the rates for the Bureau De Change operators, Investor and Exporters (I & E) window and CBN rate.

The Augusto and Company report pointed out that although the country’s import will drop due to travel restrictions and lockdowns in local and global economies, it does not believe that this will provide sufficient support for the naira.

With government of some of the world’s major economies enforcing lockdown and restrictions on both international and local travels, the consumption of energy has shrunk materially which has led to a supply glut in the crude oil market. This is further exacerbated by the trade war going on between Saudi Arabia and the Russians.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Coronavirus

COVID-19 Update in Nigeria

On the 25th of February 2021, 634 new confirmed cases and 6 deaths were recorded in Nigeria

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Covid 19 update symptops

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 154,476 confirmed cases.

On the 25th of February 2021, 634 new confirmed cases and 6 deaths were recorded in Nigeria.

To date, 154,476 cases have been confirmed, 131,699 cases have been discharged and 1,891 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 1.49 million tests have been carried out as of February 25th, 2021 compared to 1.44 million tests a day earlier.

COVID-19 Case Updates- 25th February 2021,

  • Total Number of Cases – 154,476
  • Total Number Discharged – 131,722
  • Total Deaths – 1,891
  • Total Tests Carried out – 1,489,103

According to the NCDC, the 634 new cases are reported from 22 states- Lagos (259), Osun (45), Edo(38), Ogun (35), FCT (33), Anambra (26), Imo (24), Ondo (24), Akwa Ibom (20), Plateau (20), Abia (19), Kaduna (19), Ebonyi (17), Borno (10), Rivers (10), Kano (9), Delta (8), Kebbi (7), Nasarawa (4) Oyo (3), Enugu (2) and Ekiti (2).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 55,122, followed by Abuja (19,115), Plateau (8,854), Kaduna (8,422),  Oyo (6,708), Rivers (6,398), Edo (4,491), Ogun (4,277), Kano (3,716), Ondo (2,944), Kwara (2,875), Delta (2,539), Osun (2,326), Nasarawa (2,208), Gombe (2,031), Katsina (2,029), Enugu (1,998), Ebonyi (1,839), Anambra (1,615), and Abia (1,487).

Imo State has recorded 1,440 cases, Akwa Ibom (1,439), Borno (1,247), Bauchi (1,221), Benue (1,188), Niger (912), Ekiti (797), Sokoto (768), Bayelsa (767), Adamawa (762), Taraba (712), Jigawa (496), Kebbi (358), Yobe (268), Cross River (267), Zamfara (219), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

Governor Babajide Sanwo-Olu of Lagos State announced the closed down of the Eti-Osa Isolation Centre, with effect from Friday, 31st July 2020. He also mentioned that the Agidingbi Isolation Centre would also be closed and the patients relocated to a large capacity centre.

Due to the increased number of covid-19 cases in Nigeria, the Nigerian government ordered the reopening of Isolation and treatment centres in the country on Thursday, 10th December 2020.

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On 26th January 2021, the Federal Government announced the extension of the guidelines of phase 3 of the eased lockdown by one month following the rising cases of the coronavirus disease in the country and the expiration of phase 3 of the eased lockdown.

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READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

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Corporate Press Releases

NIFIAN elects JAIZ Bank MD, Hassan Usman as first President

…Inaugurates pioneer EXCO members.

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The Non-Interest Financial Institutions Association of Nigeria (NIFIAN), yesterday in Abuja elected the Managing Director of Jaiz Bank Plc. Hassan Usman as its pioneer President.

Usman was inaugurated alongside other six EXCO members to steer the affairs of the umbrella body of all corporate organisations offering non-interest financial and related services in the country for a first term of 2 years.

Those elected includes Hajara Adeola, Managing Director/CEO, Lotus Capital Limited as Vice-President; Norfadelizan Abdulrahman, Managing Director/CEO of TAJBank Limited as Treasurer; and Fatai Ola Bakare, an astute in-house legal counsel and Islamic Finance expert of SunTrust Bank Nigeria Limited as the Secretary-General.

Other EXCO members inaugurated yesterday include Thaibat Adeniran, Managing Director/CEO, Cornerstone Takaful Nigeria Limited; Aminu Tukur, Managing Director/CEO, Noor Takaful Limited and Dr. Basheer Oshodi, CEO, TrustBank Arthur Limited.

In his opening address, Babayo Saidu, Chairman of NIFIAN’s Board of Trustees said the Association was registered on 28th August 2020, and duly incorporated at the Corporate Affairs Commission under Part C of the Companies and Allied Matters Act.

Parts of the objectives of NIFIAN is to promote common interest of member-organisations towards developing the non-interest financial services industry in Nigeria, creating an enabling regulatory environment through advocacy as well as deepening financial inclusion through market engagements and financial literacy. In addition, the Association aims to improve market resilience by fostering collaboration across the industry, promoting policies and programmes on Financial Inclusion, and sensitization of the populace for the economic development of the country through non-interest financial services offering.

The Executive Council is expected to steer the affairs of the Association towards the realisation of its objectives for the advancement of financial inclusion through non-interest finance in Nigeria.

In his inaugural address, Hassan Usman said the journey started more than a decade ago with Nigeria Islamic Finance Working Group, a multi-institutional platform under the auspice of EFInA (Enhancing Financial Innovation and Access.)

Usman said: “As today marks a new chapter in our pursuit, I would like to reiterate the fact that we are not there yet. This course is a journey and not a destination. While the overarching objective remains constant, the detailed operational and strategic initiatives of the Association shall continue to evolve to meet the requirements of the day.

“To this end, I pledge that over the course of my tenure, I will work with my colleagues in the Council to push some prominent initiative including promotion of sound Islamic banking and financial system and practise in Nigeria; growth and development of requisite market infrastructures such as an efficient non-interest inter-bank system.

“Pursuit of harmony in Shariah pronouncements (fatwas); represent the interest of members locally and internationally; provide advice and assistance to members pertinent to the development of their institution and deepen public awareness. I look forward to working with members to make Nigeria the Islamic Finance Hub of Africa.”

In addition, the President singled-out EFInA for the role played as the founder of what becomes NIFIAN today through its concerted support for the propagation of financial inclusion initiates through the non-interest finance industry. With the inauguration of persons of track records into the Executive Council of the Association, NIFIAN is therefore set to take on the charge towards developing the Nigerian financial markets.

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