January 29th, 2007
Nigeria targets $20-billion Diaspora remittances

The Nigerian economy will attract an average of $20-billion Diaspora remittances in the five years between 2006 and 2010.
Indications to this emerged from the governor of the Central Bank of Nigeria (CBN),Chukwuma C. Soludo's recent pronouncement in Abuja that Diaspora remittances bring about $4 billion yearly.

The CBN governor who also said that foreign direct investments (FDI) and portfolio inflows were growing, while bonds were over subscribed due to high earnings in real dollar terms, revealed that capital inflows were doubling every year with about $2.5-billion recorded in 2006 from portfolio and non-oil sectors.

Other revelations of the governor included that banks were acting as on-lending entities to foreign financial institutions, especially, multilateral agencies, while guarantees and grants were growing. Soludo also released what might be appropriately referred to as the banking sector score card for year 2006, saying that the nation's banking and finance sector was the soundest it has ever been.

According to him, "the 25 banks are strong and reliable banks, soundest the sector has ever been, with no unsound bank."

Soludo said the 25 banks now had the size of the first and second largest banks in South Africa combined, in contrast to 89 banks in Nigeria in 2003 being the size of fourth largest bank in South Africa.

He also said that growth in assets, deposits, credits, profitability; and all other performance indicators since 2004 have been astounding.

"Performance on capital adequacy and liquidity ratios is good, size of non-performing loans as percentage of total loans declined significantly, 20 out of 25 Nigerian banks in top 100 banks in Africa, and indeed, 17 out of top 40; and 4 in top 10. About 20 out of 25 Nigerian banks in top 1000 banks in the world by end of 2006 (there was none in 2003), with Nigerian banking industry as fastest growing in Africa."

Other desirable performances of the nation's banking and finance industry according to the CBN governor is that, the banking sector is the dominant sector in the Nigerian Stock Exchange, and indeed the key driver of the recent phenomenal growth of the exchange.

There are also more commercial bank branches now than pre-banking sector consolidation. The apex regulatory is currently awaiting results of continuing survey to know if employment in the sector has declined or increased since the conclusion of the first phase of the consolidation exercise.

Noting that the nation's sovereign rating is expected to improve from BB- given performance indice. He pointed out that the current market capitalisation of $35- billion is projected to double by 2007 to about $100 billion in 2008.

Other cheery performances include capital inflows more than doubling every two years to about $4- billion in 2006.

Currently, the Nigerian economy is enjoying low inflation, stable exchange rates and declining interest rates, while rate of return on investment in dollar terms remains high and stable.

Also desirable is the elimination of the external debt burden.

Soludo assured that Nigeria had enough growth reserves to sustain high growth. According to him, "agriculture has huge untapped capacity, with over 60 percent of Nigeria's arable land not under cultivation. Nigeria is a bed of gas (sixth highest in the world). It is the world's fuel of choice, The Gulf of Guinea is now a major exploration zone and Nigeria is discovering huge deepwater oil reserves".

He also said that with over 17 million Nigerians in the Diaspora, the country had prospects for huge remittances and potential supply of skills, and global networks.