October 21, 2019

CBN claims $2.6bn, not $26bn as diaspora remittances


Henry Boyo

In the World Bank’s 2018 report, titled  “Nigerians Living abroad sent $22bn home in 2017”, the Bank noted that, the top recipients of Diaspora remittances were India with $69bn, Chile ($64bn), Philippines $33bn, Mexico $31bn, Nigeria $22bn and Egypt $20bn. Notably, however, sub-Sahara Africa, attracts the most expensive average remittance cost at about 9.4 per cent, compared with the global average of 7.1 per cent. The cost of remittance for Nigerian beneficiaries, clearly, exceeds 19 per cent as N305=$1 instead of N360=$1, is ultimately paid to recipients locally.

Furthermore, in another article titled  “Diaspora Remittances 2015-2018: Positive indication on human capital development”  by Inwalomhe Donald, in The Guardian Newspaper of 18th  June 2019, the author noted  that  “data from CBN, with regard to Diaspora remittances, had outpaced oil revenue in 2015 as $21.2billion was officially sent home, by Nigerians abroad, compared with $19.6billion oil export proceeds. Similarly, Nigeria’s Diaspora remittances in 2016 and 2017 were $19.7billion and $22billion respectively, compared with oil export revenue of $10.4billion and $13.4billion. The Guardian report also noted that CBN’S ANNUAL ECONOMIC DATA, confirms that “the oil revenue was $18billion while Diaspora remittance was $25.1billion in 2018; this value confirms Nigeria as the number one African country and among the top five countries globally for such remittances!”  which CBN indicated  “were equal to 5.6% of Nigeria’s GDP in 2017!”

PWC, an International Intervention Conglomerate, also reported that 2018 Diaspora remittances, was 14 per cent higher in 2017, and 7 times the total foreign aid of about $3.359bn to Nigeria; the PWC report also confirmed that the 2018 remittances of $25bn represented 6.1 per cent of Nigeria’s GDP, and 11 times the value of Foreign Direct Investment, but was equal to 84 per cent of 2018 budget. Consequently, PWC expressed concern that “one may never know or be privy to the fundamental reasons why Nigerian Governments have serially failed, to harness the significant human and material Capital of the Diaspora Communities, as catalysts for our developmental aspirations, as some other countries have successfully done”!



Incidentally, on Saturday, 12th  October 2018, Andrew Nevin, the PWC Chief Economist, expressed this same view on Channels TV, Sunrise programme, when he emphasized the need to create a Special Purpose Vehicle, to transform Nigeria’s economy and GDP with the significant annual harvest from the Diaspora.

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There is indisputable consensus, up to this point, between World Bank Reports, with CBN and PWC official estimates on the value of Diaspora remittances.

Inexplicably, however, CBN’s record of the value of these remittances, seems to have changed radically, in the THISday Newspaper report, of Sunday 13/10/2019 titled  “CBN Clarifies Diaspora Remittances; Says Official Inflows is $2.6bn, Not $26bn!!”

The CBN’s unexpected pushback, was published, barely 7 days after Anthony Ani, who was Finance Minister 1993 to 1998, queried the present destination of Diaspora dollar remittances, in an article, titled,  “$26bn Diaspora Remittances: Where are the Dollars?”  In that article,  Tony Ani alluded to the alleged abuses identified by a columnist, Henry Boyo, in the Punch edition of  September 9, 2019.

Curiously, the former Minister, suspects that these Remittances are massively laundered by Nigeria’s banks, and therefore explained that, “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 according to Etubom Ani, necessitated the change in Nigeria’s tax laws to accommodate those in the Diaspora; expectedly, with the enactment of new tax laws in 1996, Diaspora remittances have increased, exponentially.

However, the former Minister is categorical “that Diaspora remittances are not presently domiciled in Nigeria and therefore observed that there is collaboration between CBN, Nigerian banks and Western Union/MoneyGram to retain the dollar abroad”; consequently, Ani advised that government must investigate the infraction, punish money launderers, and recover all past Diaspora remittances retained abroad!”

However, in an unexpected somersault on its earlier favourable reports on Diaspora Remittances, Mr. Isaac Okoroafor, Corporate Communications CBN’s Director, has lately, queried the sources of data being referenced by critics; the details of Okoroafor’s chat, with James Emejo of THISday was published on Sunday 13th  October, 2019, with the title  “CBN Clarifies Diaspora Remittances, Says Official Inflows Is $2.6bn, Not $26bn.”    According to Okoroafor, the 2018 data, purported to be from the World Bank, “had earlier, also, been queried by CBN’s Monetary Policy Committee (MPC)”, because they did not reflect the actual amount of inflows from abroad. Okoroafor therefore cynically noted that “we are looking for the so called $26 billion Diaspora cash, because such cash will impact positively on our reserve!” The CBN Director, reportedly also chuckled at those bandying such figures and therefore suggested that, an understanding of the methodology through which the data was sourced, could provide an insight into why critics’ Diaspora figures might be off the target! Okoroafor, also claimed that, instances of inaccurate statistics, further lent credence to the recent call by President Muhammadu Buhari that homegrown data should predicate the recommendations of the latest Presidential Economic Advisory Council!

Indeed, President Buhari recently faulted the statistics on Nigeria produced by the IMF/World Bank, and described them as wild estimates, while Okoroafor similarly observed that “the IMF and the World Bank have recently churned out data, suggesting structural weaknesses in Nigerian’s economy and, consequently, advised government to activate urgent reforms. Nonetheless, Okoroafor noted that these foreign bodies had often admitted that their narratives were somewhat faulty;” however, the CBN Director assured Nigerians of CBN’s readiness “to correct their mistakes.”

Okoroafor also suggested that “the calculation of remittances by these foreign bodies, usually include data from inward official sources like Western Union, as well as money/cash being brought by Diaspora Nigerians, coming home for any social or family function.

Consequently, the Director explained that, “now, when the World Bank sums up the dollar value of these various activities, they say we receive Diaspora remittances of $26 billion. I’m disappointed that enlightened people could now say remittances is $26 billion, which gives the impression as if CBN has it in its pocket.” It is however, not unusual for the federal government and foreign bodies to differ on such data; recently, for example, government and World Bank also differed on the source and value of spending on Social safety nets, which the World Bank claims is funded primarily from Development/Aid Partners.

Finance/Budget and National Planning Minister, Mrs. Zainab Ahmed, also differed with the World Bank, on source for funding social investment; the Minister has conversely, explained that Nigeria’s intervention programmes, include pensions, health and disability insurance programmes and several other programmes that other countries put together and highlight.

Ultimately, irrespective of the above differences, the CBN should defend its earlier report of celebrated Diaspora remittances and explain why Nigerian beneficiaries of its reported modest $2.6bn were not paid in dollars by respective banks.