As revenue from oil earnings continue to plummet, the Federal Government, it was learnt, might be considering a more robust effort aimed at mobilizing diaspora remittances to serve as a catalyst for economic development.
The New Diplomat gathered that with plummeting oil revenue occasioned by a multiplicity of factors including a glut in international storage capabilities, and COVID-19 pandemic, the federal government is now more desirous of tapping into diaspora resources and contributions in a determined move to help boost our national economy.
Presidency sources revealed that an agency of the federal government has been mandated to examine a recent report by PricewaterHouse Coopers(PwC) which came up with astonishing findings that diasporan remittances had outperformed oil revenue in one of the most recent years that the report focused on(2018)
Recall that in the recent report by PricewaterhouseCoopers (PwC), the global professional firm noted that Nigerians living abroad remitted about $25.1 billion into the country in 2018. This figure is expected to rise to $34.89 billion by 2023. In 2018, the oil revenue was $18 billion compared to $25.1 billion sent back home by Nigerians abroad.
From the Central Bank of Nigeria, CBN’s records, diaspora remittances thus exceeded gross oil revenue. The nation’s Diaspora remittances have been on the ascendancy in recent time. In 2016 and 2017, it stood $19.7 billion and $22bn respectively, compared with oil export revenue of $10.4bn and $13.4 billion in the corresponding years.
Similarly, in 2018, Diaspora remittances equal 84 percent of the federal government’s budget as Nigeria’s budget was $29.9 billion while Diaspora remittances stood at $25.1 billion. It also far outweighs capital expenditure. Nigeria’s 2019 capital expenditure budget of $6.7 billion but remittance inflow was $25.5 billion. This means that using the 2018 remittance figure of $25.1 billion, it equated to at least four years of Nigeria’s capital expenditures.
In recognizing the strategic importance of the Nigerian diasporans, the Federal Government signed the Nigerians in Diaspora Commission Establishment Bill into law in July 2017. The Law established the Nigerians in Diaspora Commission (NiDCOM), which was set up to engage and utilize the human, capital and material resources of this demography in the socio-economic, cultural, and political development of Nigeria.
The country also floated a $300m Nigerian diaspora bond and introduced a Certificate of Capital Importation (CCI) are a few steps in that direction. The CCI, issued by Nigerian banks, confirms an inflow of foreign currency in cash or goods and facilitates straight-through processing. Nigeria has also become a member of the International Association of Money Transfer Networks.
Also, the remittances were far more than the total of all foreign aids and represented a higher single percentage of the country’s Gross Domestic Product (GDP) and far more than the Foreign Direct Investment (FDI).
To this effect, Dr. Andrew Nevin, Chief Economist of PwC, disclosed that the remittance inflows into the country show that Nigeria and Nigerians depend largely on the diaspora to make headway in many ways.
He explained that the value of migrant remittances in 2018 represented 6.1% of Nigeria’s GDP, 11 times the FDI inflows, and 7.4 times larger than the foreign aid received in 2017.
On his part, Aminu Gwadabe, president of Association of Bureau De Change Operators of Nigeria, ABCON listed the importance of migrant remittances to the economy to include serving as a lifeline for the recipients’ small household in the economy and used for health, nutrition, education, and societal needs.
