In three years, Nigerians in diaspora remitted $60.22 billion to enhance economic activity and the country’s foreign reserves. According to statistics from the World Bank and the Federation’s Budget Office.
According to the World Bank, Diaspora remittances into Nigeria were valued at $23.81 billion in 2019 while the Ministry of Finance, Budget, and National Planning said in its 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper that Diaspora remittances were $17.21 billion in 2020 and $19.2 billion in 2021.
Prior to 2020, Nigeria’s remittance inflows have only gone below $20 billion once, at $19.7 billion in 2016.
Diaspora remittances were among the main non-oil foreign exchange sources for the country, according to the budget office. It added that higher inflows of Diaspora remittances into the country in 2021 were due to a series of initiatives implemented by the Central Bank of Nigeria.
It added that the country was counting on increased Diaspora remittances in 2022 to reverse the country’s decrease in foreign reserves and boost its current account balance.
The office stated that the nation’s foreign reserves were continuously declining because the CBN was intervening in the official market to stabilize the currency rate.
Another cause, according to the agency, was the country’s failure to reach its crude oil output quota. It went on to say that upgrading 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 the 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.
