Nigerians in the Diaspora remit $60.22bn in three years

Nigeria’s Diaspora remittances hit $60.22bn in the three years accounting for a significant chunk of foreign exchange inflows, according to data from the World Bank and Budget Office of the Federation.

According to the World Bank, Diaspora remittances into Nigeria were estimated at $23.81bn in 2019. In its 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the Ministry of Finance, Budget and National Planning, disclosed that Diaspora remittances were $17.21bn in 2020 and $19.2bn in 2021.

Prior to 2020, Nigeria’s remittance inflows had only fallen below $20bn once, when numbers tanked to $19.7bn in 2016.

According to the budget office, Diaspora remittances were among top sources of non-oil foreign exchange for the nation. It explained that a string of policies from the Central Bank of Nigeria was responsible for increased inflows of Diaspora remittances into the nation in 2021.

It stated that the nation was banking on improved Diaspora remittances in 2022 to reverse the decline in its foreign reserves and strengthen its current account balance. The office clarified that the continuous decline in the nation’s external reserves level was because the CBN was intervening in the official market in a bid to stabilise the exchange rate. Another reason was the nation’s failure to meet its crude oil production quota, the office noted.

It further explained that improving the nation’s external reserves was dependent on increased remittances. As of June 16, the nation’s external reserves were out at $38.66bn.

The office said, “The World Bank projects Nigeria’s Diaspora remittance inflow to increase by 7.1 per cent in 2022 reflecting the gains of the continued adoption of official bank channels and the expectation that more migrants will likely send more money home to support families in the face of increases in cost of living,

“This is expected to reverse the decline in the foreign reserve position and strengthen the current account balance, which has been in a net deficit since Q1 2019.”

The International Monetary Fund defines remittances as household income from foreign economies arising mainly from the temporary or permanent movement of people to these economies.

It explained that remittances included: cash and noncash items flowing through formal channels such as electronic wire, or through informal channels such as money or goods carried across borders.

It further said remittances helped recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses, service debt, and drive economic growth.