Foreign currency crisis hit commercials banks, as CBN seeks to boost naira

  • Nigerian banks have been hit with scarcity of foreign exchange as the CBN makes efforts to stabilise the naira
  • Visits to most commercial banks in Lagos reveal that the banks have run short of the $100 bills and are offering customers $20 bills instead
  • This comes as report show that Nigerians abroad have remitted over $60 billion home in the last three years

Commercial banks in Nigeria are groaning over an unprecedented forex crisis which seems to have worsened in the last few days as the Central Bank of Nigeria embarks on efforts to strengthen the local currency which dipped to an all-time low penultimate week.

Checks by Legit.ng show that the scarcest of them is the US dollar which seems to be in short supply followed by the pounds sterling.

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Banks in Nigeria, Diaspora remittance
Forex scarcity hit banks in Nigeria
Credit: tommaso79
Source: Getty Images

Visits to some commercial banks in Lagos State show that most of them have run short of the US greenback and are giving excuses to their customers.

No $100 bills

The banks complain about the scarcity of the $100 notes which are mostly preferred by customers while the customers say the lower denominations attract lower rates at the parallel market.

Customers whose money came via money transfer companies like Western Union and others were unable to access them through the banks.

According to those interviewed by Legit.ng, they became frustrated by their inability to access their money in foreign currency despite the rebate incentive offered by the Central Bank of Nigeria (CBN) that banks should pay N5 for every $1 withdrawn by customers.

Nigerians abroad remit $60.22bn in three years

This comes as Diaspora Nigerians were said to have remitted $60.22 billion in three years, according to a report by The Punch, which has boosted the economic activities of Nigeria and shored up the external reserves, according to data obtained from the World Bank and Budget Office.

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The World Bank states that remittances from abroad into Nigeria have been estimated at $23.81 billion in 2019.

The Ministry of Finance, Budget and National Planning stated that Diaspora remittances amounted to $17.21 billion in 2020 and $19.2 billion in 2021.

Forex inflows had dipped below $20 billion once after falling to $19.7 billion in 2016.

The budget office stated that remittances from Nigerians abroad were among the top sources of non-oil foreign exchange earners for Nigeria, explaining that a series of policies from the CBN was responsible for the increased forex inflows into Nigeria last year.

It said Nigeria was hoping for improved diaspora remittances in 2022 to reverse the decline in its foreign reserves and boost its balance sheet.

Latest record show 10 African countries with highest Diaspora remittances

Legit.ng reported that Nigerians abroad have sent a total of $19.2 billion home in 2022 alone. World Bank said that in 2022, the remittance view is moderately positive, according to Business Insider.

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The bank released its Migration and Development Brief, saying that growth is expected to continue at 7.0 per cent to $55 billion.

The growth, World Bank said, is despite the general adverse economic environment globally.

Source: Legit.ng

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