The people of the Nigerian diaspora have paid 65.34 billion dollars over three years to boost economic activities in the country, according to data obtained from the World Bank.
According to World Bank data, in 2018, Nigerian diaspora remittances amounted to $ 24.31 billion; in 2019, it fell to $ 23.81 billion; and in 2020, it fell to $ 17.21 billion.
Remittances accounted for 4% of Nigeria’s gross domestic product in 2020.
According to the United Nations Department of Economic and Social Affairs, Nigeria had 1.7 million diaspora inhabitants in 2020.
This puts the average Nigerian remittances abroad (based on the 2020 diaspora population) at $ 38,428.15 over three years.
Since 2008, India has held the trophy for the largest recipient of diaspora remittances, as it takes advantage of its large pool of sought-after technology experts overseas.
However, in the years under review, on average per person, Nigeria received more remittances than India and Bangladesh, another major diaspora remittance destination.
In 2020, India had 17.9 million diaspora people and received $ 245.27 billion in remittances during the three years under review.
While India’s remittances eclipsed those from Nigeria, its remittances per diaspora population stood at $ 13,702.30.
Bangladesh had 7.4 million diaspora inhabitants in 2020. It received a total amount of $ 55.68 billion from 2018 to 2020. This brings the country’s remittances per diaspora to 7,524.29.
Diaspora remittances made up a larger share of Bangladesh’s GDP than any of the other two countries. Remittances as a percentage of GDP in 2020 were 4% in Nigeria, 3.1% for India and 6.6% for Bangladesh.
There are possibilities, however, that the Nigerian diaspora population is larger than what has been officially captured.
The President’s Senior Special Assistant for Foreign Affairs and Diaspora, Abike Dabiri-Erewa, said in 2017 that there were around 15 million Nigerians in various parts of the world.
According to the International Monetary Fund, remittances are income of households from foreign economies primarily from the temporary or permanent movement of people to those economies. Remittances include cash and non-monetary items that pass through formal channels such as wire transfers, or informal channels, such as cash or goods transported across borders.
The IMF said remittances help the poorest recipients meet basic needs, finance cash and non-cash investments, finance education, foster new businesses, repay debt and , essentially, to stimulate economic growth.
The federal government enacted the Nigerian Diaspora Commission Bill in July 2017, after recognizing the strategic importance of the Nigerian Diaspora.
The law established the Nigerians in the Diaspora Commission, which was established to engage and utilize the human, capital and material resources of this demographic in the socio-economic, cultural and political development of Nigeria.
Abike Dabiri-Erewa has been appointed the first President and CEO of the Commission. In 2019, the federal government went further by recognizing July 25 of each year as National Diaspora Day.
There is also another possibility that remittances to Nigeria are much higher than those officially captured. Indeed, many Nigerians abroad are exploring unofficial ways to send money home in order to maximize unofficial exchange rates.
To increase official channels for diaspora remittances, the Central Bank has recently put in place a number of measures in the face of declining foreign exchange from other sources.
In March, apex bank introduced the “Naira-4-Dollar” policy as a way to increase the country’s foreign exchange inflows.
The CBN introduced a rebate of N 5 for every dollar of funds paid to Nigeria through international money transfer organizations, claiming that the increase in remittances “can only be achieved if the infrastructure of transfer improves and if the right policies are put in place ”.
CBN Governor Godwin Emefiele said at the time: “In addition, in an effort to reduce the cost of sending remittances to Nigeria by Nigerians working in the diaspora, the Central Bank of Nigeria introduced a discount of N 5 for every dollar of funds remitted to Nigeria, through IMTOs approved by the Central Bank.
“This remittance will be paid into the bank accounts of the beneficiaries, after receipt of the remittances.
“We believe this new measure will help make the process of sending remittances through formal banking channels cheaper and more convenient for Nigerians in the diaspora.”
PwC had said the policy could push the country’s foreign remittances to $ 34.89 billion by 2023.
On only two occasions has total annual remittances to Nigeria fallen below $ 20 billion since 2011 – in 2016 and 2020. In 2016, Nigeria recorded $ 19.7 billion as a ‘official remittances.
In 2017, the Debt Management Office issued a $ 300 million diaspora bond and the proceeds were used to finance part of the 2017 budget deficit.
The $ 300 million was issued as part of the new external borrowing of 1.07 billion naira specified in the 2017 budget law for the partial financing of the budget deficit.
SD&D Capital Investment chief executive Gbolade Idakolo said insecurity was one of the main reasons remittances fell in 2020.
He said: “The number one cause is the insecurity in the country. Remittances for investment have been halted in mining, agriculture and manufacturing.
“In addition, there are the adverse policies of the CBN with regard to diaspora remittances.
“These policies cause some people in the diaspora to lose faith in Nigeria.
“However, the CBN is now trying to create a soft landing for remittances to encourage inflows. The policies had negatively affected diaspora remittances because those in the diaspora were not sure where they were going. repatriation of their funds when they had invested.
“Another problem is the investment climate in the country and the government does not make enough use of our embassies and representatives in various countries to be able to ensure that we are receptive to foreign investment.”
Idakolo said Nigeria needs to learn from countries like the Philippines and Kenya who pack their citizens under a well-regulated system to countries where their services would be needed, where they were sure their citizens would be able to get good jobs and stimulate the diaspora. remittances.
He attributed this as the reason the Philippines and India are ahead of Nigeria in diaspora remittances.
Idakolo added: “The major implication is that the foreign reserve will continue to be depleted and that it will not be able to finance a large amount of imports for Nigeria.
“The second is that most of these investments that would have boosted the economy are nowhere to be found. Low investments lead to increased unemployment and generally hardship in the country. ”
Former CBN deputy governor Obadiah Malafia said the COVID-19 pandemic was the reason remittances fell in 2020.
He said: “COVID-19 is one of the reasons as it has led to widespread lockdown in advanced industrial countries where Nigerians in the diaspora live. Related to this is the rise in unemployment and the closing of businesses. It affected the previous year’s remittances in one way or another.
“Third, the rising cost of transfers, when people want to transfer their money, the cost is usually high, which discourages remittances.
“Diaspora remittances play a very important role in the economy. When they are low, the amount of currency in circulation becomes low and people start chasing dollars, causing their value to skyrocket against the naira.
“My advice to the government is to make the country a better place, to strengthen the financial sector; create a safe corridor for the entry of remittances and encourage diaspora bonds as an avenue where Nigerians from other countries can invest.
He also urged the government to maximize and optimize whatever comes from remittances to develop the country.
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