Today marks the sixth observance of the United Nations International Day of Family Remittances. This observance is apt, not just for most developing countries that benefit from remittances, but also Nigeria, which is increasingly dependent on remittances for its economy.
These transfers have an enormous impact in developing countries as one of the largest financial inflows, competing only with international aid. The UN Governing Council proclaimed June 16 International Day of Family Remittances during a session in Rome in February 2015.
More than 500 billion US dollars are transferred every year between family members across country borders worldwide, according to UN estimates. These remittances provide opportunities for education, food, health, and housing for the recipients. Of that amount, Nigeria receives $25 billion, or 5 percent.
Signs advertising money transfer companies are visible on streets all over the world, from cosmopolitan cities to small, rural villages in addition to a large number of online transfer services.
The UN resolution recognizes the critical contributions of migrants in supporting their families living in fragile states and during times of crisis.
As the rate of unemployment continues to rise, with the attendant pressure it leaves on families, Nigeria’s growing remittance payments is filling the gap so adequately that it may dictate wisdom for the federal government to facilitate and lubricate easier remittance systems.
Just before the advent of COVID-19, Nigeria was getting roughly $25 billion annually from remittance payments. That constituted roughly 6 percent of the country’s GDP, and roughly what Nigeria budgeted for her 2020 fiscal expenditure before the downward adjustment due to COVID-19. Nigeria’s receipt of Diaspora remittances accounts for roughly 67% of remittances to West Africa.
A National Bureau of Statistics (NBS) report says remittances from Nigerians in the Diaspora rose from $3.24 billion in 2013 to approximately $25.08 billion in 2018. It is plausible, then, that over the last 6 years, Nigerians in Diaspora sent almost $100 billion to the country.
And it doesn’t end there. PricewaterhouseCoopers (PWC) forecasts that the total remittance inflow to Nigeria will grow from its current $25.08 billion to US$34.89 billion in 2023.
It is estimated that 17 million Nigerians live abroad. Of the 17 million, it is estimated that 4 million of them are students, an indication that Nigeria’s Diaspora population will continue to rise in tandem with remittances.
With the current trend, it is arguable that contrary to concerns about brain drain on the Nigerian economy, Nigerians out there are contributing to this economy in a way that they may be benefitting this economy more than if they were jobless at home.
Diaspora remittances are one area government may need to oil, even as those funds contribute to nation building.
As the world, especially developing nations celebrate the United Nations International Day of Family Remittances today, it behooves the government to reflect on the $25 billion contribution Nigerians living abroad remit to the country yearly.
We also call on the government to increase effort to protect Nigerians living abroad, as well as their interests. We make this plea with Nigerians living in South Africa, some Middle Eastern and Asian countries in mind.