The Nigerian Diaspora community has voiced apprehension as they foresee a looming and substantial decline in remittances for the year 2023.
Their concerns stem from the pervasive effects of a global economic downturn, a predicament that has not spared the diaspora population. This economic hardship, which has cast its shadow on nations worldwide, is now poised to affect the financial contributions sent back to Nigeria.
A report by Western Union titled: ‘Global Money Transfer Index: Uncovering consumer expectations of the remittance industry (The Africa Series)’ said Nigerians in Diaspora cannot currently transfer a lot of funds home because of a harsh global economic condition.
It stated that this is as most remittance receivers in the country revealed that they will need to get more money from senders due to a cost-of-living crisis.
It noted that two in three consumers (63 per cent) of the Nigerians who took part in its survey stated that they collect funds at least once a month, with 70 per cent also transferring money abroad at the same rate.
Western Union said,“Senders agree they must transfer bigger sums in the 12 months ahead (82 per cent). However, they face a problem: three-quarters (75 per cent) of them — increasing to 84 per cent of senders aged from 18 to 24 — say global economic conditions mean they cannot transfer as much currently as they did in the past.”
The regional vice president, Africa at Western Union, Mohamed Touhami El Ouazzani, opined, “Economic headwinds have impacted all consumers globally, and remittances play an integral role in ensuring people and their communities can keep moving forward, leveraging opportunities.”
The World Bank reports collated by our correspondents, underscored the magnitude of the diaspora’s contribution, revealing that an impressive $168.33 billion was remitted to Nigeria over the past eight years. This financial lifeline has played a pivotal role in mitigating the impact of foreign exchange scarcity, maintaining the country’s forex reserves and supporting its economic resilience.
In 2022, sub-Saharan Africa experienced a 5.2 per cent increase in remittances, with Nigeria receiving the lion’s share amounting to $53 billion, further highlighting the significance of these international funds. The data reflects a consistent flow of remittances, totaling $168.33 billion between 2015 and 2022, demonstrating the diaspora’s enduring commitment to supporting their home country.
However, despite this impressive track record, the community now grapples with the potential disruption of this financial lifeline due to the current global economic challenges.
The World Bank’s insights further emphasised the pivotal role of diaspora remittances as one of the top sources of non-oil foreign exchange for Nigeria in 2022.
A breakdown of the figures showed that in 2015, the Diaspora remittance was $21.2bn; it fell to $19.7billion in 2016; and increased to $22illion in 2017.
By 2018, it was $24.31billion. It soon fell to $23.81billion in 2019, and the pandemic caused it to plummet to 17.21billion in 2020. It made a rebound to $19.2billion in 2021 and by 2022 the World Bank estimated that the inflows into the country had reached $20.9billion.
Prior to 2020, Nigeria’s remittance inflows had only fallen below $20billion once, when it fell to $19.7billion in 2016. According to the World Bank, Diaspora remittance one of the top sources of non-oil foreign exchange for the country in 2022.