Those bogus statistics are becoming bare. Yes, “Diaspora remittances to Nigeria witnessed a huge decline in H1 2023, according to the latest International Payment data released by the Central Bank of Nigeria. Compared to the $10.11 billion recorded in the same period last year, the decline has dealt a massive blow to Nigeria’s hope to boost its forex liquidity with Diaspora remittances.”

(The data quoted here seems not correct since Nigeria received about $20 billion remittances in 2022)

Add that to the bogus petrol consumption (has since dropped by more than 37%), you will see that Nigeria has a deep problem: guesswork policymaking.  Most of those “diaspora remittances” were round-tripped hard currency which agents of “the connected” were bringing back to the nation, at black market rate, after buying them at the original rate.

With the official and the parallel market rates getting to parity, that round-tripping will fade. But do not rejoice: they will invent another trick since nothing is punished in the nation.

As I noted in Tekedia Investment class on Saturday, the optimism in the banking stocks in the Nigerian stock exchange is not due to any fundamental redesign on what banks are doing, rather, people are buying into massive dividends which we expect to happen as banks reclassify foreign currency denominated assets, creating ephemeral > 40% profit overnight (it used to be N415/$, now you can use N700).  My thesis was that diasporas were not wiring money to buy equities (and CBN data just confirmed that, since we dropped from $10b to now $1b).

Until Nigeria begins to punish the connected who mess up the economy, nothing will change.

Diaspora remittances to Nigeria witnessed a huge decline in H1 2023, according to the latest International Payment data released by the Central Bank of Nigeria. Compared to the $10.11 billion recorded in the same period last year, the decline has dealt a massive blow to Nigeria’s hope to boost its forex liquidity with Diaspora remittances. (The data quoted here seems not correct since Nigeria received about $20 billion remittances in 2022)

A detailed analysis of the data revealed that Nigeria witnessed a gradual increase in remittances over several months in 2023. In January, the country recorded $79.2 million in remittances, which slightly rose to $83.8 million in February. March witnessed a significant jump in total direct remittances, reaching $138.6 million.

In April, the country received $150 million as direct remittances, followed by a further increase to $202.9 million in May. By June 2023, total direct remittances reached $297.5 million, indicating a consistent upward trend in remittances.

The CBN did not give a reason for the decline, which has raised concerns about the nation’s chances of addressing its forex changes in the short term. However, Partner, Chief Economist, and Head of Research at KPMG Nigeria, Dr. Yemi Kale, attributed the decline to probably “election uncertainty and the CBN cash and forex drama in Q1.” He said he won’t be bothered till he sees “Q3 and Q4” remittance data.

Nigeria’s major source of forex inflow is crude oil export. But the crisis in the oil sector has seen a drastic reduction in the country’s earnings from crude oil export, forcing it to largely rely on Diaspora remittances, which is regarded as its second major source of forex.

In 2021, the CBN introduced the Naira4dollar remittance scheme, as a way to encourage Nigerians living abroad to send foreign currencies back home. Under the scheme, commercial banks were required to pay recipients of remittances the incentive of N5 for every $1 remitted and received.

There was also the RT200 FX Programme launched in early 2022, with a set of policies and plans for non-oil exports. The aim is to use the programme to attain the goal of $200 billion in FX repatriation, exclusively from non-oil exports, in 3-5 years.

In 2022, Nigeria recorded $20.16 billion in Diaspora remittances, augmenting the meager forex proceeds from crude oil sales.

The Naira4Dollar scheme and the RT200 FX Programme have been discontinued following the floating of the FX market last month.

Meanwhile, the central bank has issued a directive to International Money Transfer Operators (IMTOs) to begin disbursing remittances to beneficiaries in Naira, alongside foreign exchange.

The apex bank specified that the exchange rate used for determining the Naira pay-out should be based on the Investors and Exporters’ Window foreign exchange rate.

The directive was outlined in a circular, referenced as FED/FEM/PUB/FPC/001/004, issued by Dr. Ozoemena Nnaji, the Director of Trade and Exchange at the CBN.

The circular, dated July 10, 2023, builds upon a previous circular dated November 30, 2022, which introduced guidelines for the payout policy of Diaspora remittances to beneficiaries in Nigeria.

The November 30 circular facilitated the payment of remittances in U.S. dollars to beneficiaries through IMTOs, providing unrestricted access to their funds via their chosen designated bank.

The new circular emphasizes that the option of Naira payment is an additional choice available to recipients of Diaspora remittances, in addition to United States Dollars and E-Naira.

The CBN’s full circular states, “Further to the circular referenced FED/FEM/FPC/01/011 dated November 30, 2022, in respect of the above subject, the Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.

“Accordingly, all recipients of Diaspora remittances through the CBN-approved International Money Transfer Operators (IMTOs) on the attached list shall henceforth have the option of receiving Naira payment in addition to USD and e-Naira as payout options.

“For the avoidance of doubt, IMTOs are required to pay out the proceeds using the Investors’ & Exporters’ window rate as the anchor rate on the date of the transaction.

“The regulation takes effect immediately.”

Microsoft has won the lawsuit with the Federal Trade Commission, allowing for the completion of its acquisition of Activision Blizzard deal which was halted following the regulator’s legal intervention last December.

US District Judge Jacqueline Scott Corley of San Francisco dismissed the FTC’s claim that the agreement would negatively impact consumers, as it would grant Microsoft, the maker of Xbox game consoles, sole access to popular games such as the highly sought-after Call of Duty.

The European Union Commission had last month approved the $69 billion deal, while the U.K.’s Competition and Markets Authority (CMA) and the FTC were opposed to it.

The regulators were all concerned that the deal will impact competition in the nascent cloud gaming market. The bone of contention is that by merging Activision Blizzard’s games with Microsoft’s cloud game streaming for Windows, Microsoft has the potential to diminish the competitiveness of other PC operating system providers in relation to its own Windows operating system.

The judgment is a huge blow for Sony, which pushed vigorously to prevent the deal – providing evidence to support the FTC’s anti-competition claims. Part of the PlayStation testimony is the argument by its boss, Jim Ryan, that Game Pass is bad for the industry. He said it is secretly but “unanimously” hated by game developers.

In its anti-competition argument, the FTC said if the deal goes through, it will enable Microsoft to leave rival console makers like Nintendo and market-leader Sony Group out in the cold – using the Activision games.

But the court disagreed. In her ruling, Judge Corley held that Microsoft has shown a level of commitment to keep games from Sony, adding that the FTC has failed to prove how the deal will lessen competition.

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” she wrote.

“Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. The record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”

The legal system worked:

A fair and neutral court has reached the correct conclusion about Activision Blizzard’s merger with Microsoft based on facts and the law.

The judge’s ruling rejects the FTC’s ideologically-driven attempt to prevent a deal that benefits gamers and allows…

— Lulu Cheng Meservey (@lulumeservey) July 11, 2023

Activision shares surged 10 percent while Microsoft shares rose 64 cents to $332.47 following the ruling. The FTC has until Friday to appeal the decision.

The ruling is expected to make things easier for Microsoft in the U.K., after paving the way for the deal in the U.S. Following the US judge’s ruling, the CMA expressed its willingness to assess Microsoft’s proposals aimed at addressing antitrust issues within the UK. This suggests that there is a possibility of the two parties reaching a resolution.

In a statement, Microsoft said that its attention has now shifted back to the UK. Although the company maintained its disagreement with the CMA’s decision, it acknowledged that it is actively exploring potential modifications to the transaction in order to address the concerns raised by the authority.