Reports by World Bank and Budget Office of the Federation revealed that Nigerian population in the Diaspora remitted the sum of $60.22bn in the three years to enhance economic activities and the nation’s external reserves.
According to World Bank, remittances into Nigeria were estimated at $23.81bn in 2019 and between 2023 and 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the Ministry of Finance, Budget and National Planning, revealed that Diaspora remittances were $17.21bn in 2020 and $19.2bn in 2021.
Meanwhile, in 2020, Nigeria’s remittance inflows fell below $20bn once, when it fell to $19.7bn in 2016.
Also, in line with the budget office, Diaspora remittances were said to be among top sources of non-oil foreign exchange for the nation. It buttressed that a string of policies from the Central Bank of Nigeria was the reason for increased inflows of Diaspora remittances into the nation in 2021.
It was also stated that the nation was banking on improved Diaspora remittances in 2022 to reverse the decline in its foreign reserves and uphold its current account balance. The office further 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.
Furthermore, improving the nation’s external reserves was dependent on increased remittances. As at June 16, the nation’s external reserves were out at $38.66bn.
According ro the office, “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 thereby defines remittances as household income from foreign economies arising mainly from the temporary or permanent movement of people to these economies.
It also expressed that among remittances are: 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 opined that remittances helped their recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses, service debt, and drive economic growth.
