Enough of Nigeria’s dependence on Diaspora remittances

The issue of remittances in Nigeria dates back to the early  ’60s when the first set of Nigerians that went abroad attempted to salvage the plight and economic status of those back home. Since there was no significant difference in the value of Naira to the dollar, it was not much of a big deal until the late 80s during the era of General Ibrahim Babangida. That was when the Naira was first devalued and Nigerians abroad realized the wisdom of sending a few dollars home only to be compensated with multiple Naira. In an article credited to a former finance minister, Anthony Ani, the use of IMTOs like Western Union and MoneyGram contributed to the success experienced at the time, as many Nigerians that live abroad willingly sent money to their wards back home for one purpose or the other.

In searching for the meaning of Diaspora, I found the one by dictionary.com very interesting. It describes it as “any group that has been dispersed outside its traditional homeland, especially involuntarily, as Africans during the trans-Atlantic slave trade”. The dictionary may have attributed early migration to the trans-Atlantic slave trade but the Nigerian diaspora had its reason for migration. The existence of the Nigeria diaspora can be described under the following category;

These categories share a common denominator in the failure of government and leaders to project hope and faith in the country of Nigeria. Their departure or migration would then easily fall under involuntary status. Of interest to me was the word “involuntary” in the above definition, and that is the deep and inner rationale of this article.

Focusing on Diaspora remittances is not bad as we have seen countries like India and Bangladesh generate and support their local economy with this source of fx revenue. The ratio of remittances to GDP of these countries tells of the impact, which if well harnessed could lead to great advantage. However, Nigeria’s current attention, dependence and recognition, leading to an established rule of appropriation in terms of channels, rate of exchange coupled with some strategic policies to drive its continuous and enhanced flow into the country is what gives concern and should be reviewed for the following reasons.

Firstly, the diaspora is made up of people who have taken their destiny into their hands. While Nigerian government leaders struggle to meet their obligation to the citizens, the issues of trust between the people and government have waned over the years. Many people now have the cause to deal with the government, based on conspiracy theories. For instance, there is a conspiracy theory that a few Nigerians are on a journey to cripple the educational system of Nigeria arising from the use of outdated curriculum, quota system, poor funding of the education sector, prolonged strike in the sector with agitators left unattended, etc. While the rich spend so much to educate their children abroad, or where they do not want to go abroad, patronize schools with foreign curriculum in Nigeria, public schools that most of us attended are left to become sheds, cisterns and dilapidated structures.

Secondly, the diaspora is made up of people who out of frustration, moved on to justify their training sacrifices by way of earning commensurate remuneration and to compete with their peers across the globe. They abhor the flagrant disregard for their skills locally when they are in high demand abroad. They claim that the arrogant and insincere attitude of the government towards their plight does not encourage further commitment. For instance, a serving minister claimed that there were enough doctors in Nigeria and those desiring to migrate should do so with all pleasure. Recently, a foreign government conducted interviews for skilled workers within Nigeria to employ them to work abroad.

Thirdly, it is common in certain parts of Nigeria for parents and family members to put pressure on younger family members to travel as it is seen as a sign of success. In such instances, victims have had to illegally usurp common family wealth to pursue their dream and when they do this, they take the tortuous path of crossing to Europe on land. While some succeed, many others fail and return empty and if unlucky, die in transit.

This is one side of the story of the diaspora! The other story is that of those who left either as foreign affairs employees under the FGN civil service or those on cross-posting under private sector employment. However, those who decided to take their destiny into their hands constitute the majority and are mostly responsible for the remittances that the federal government not only plans to use as a source of foreign exchange, but also use to defend the naira. Earlier statistics in this article showed that in the year 2020, the decline in the remittance to Nigeria, was so significant that it led to a 28% decline in the sub-region and without which the region would have recorded a 2.3% growth. That is how hard our brothers toil abroad to give us a good life back home. Though many claim that it is beer parlour discussion, the word on the street is that it favours the diaspora to send a few dollars for so much Naira. So,  the federal government’s continuous recognition and dependence on diaspora remittance in addition to using it to defend the Naira is a battle that successive governments have fought without victory and which requires a different strategy.

Coming next is the concluding part 3 of this article, whose part 1 looked at global facts. The third part of this article addresses my recommendations with potential to solve issues around diaspora remittances shortfall, alternate channels and the right exchange rate that is expected to engender prosperity for both the FG and the citizens.

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Adolphus Aletor, FCA, MCIB, a banker and finance analyst, is the managing director/CEO, Rigo Microfinance Bank; he can be reached on +2348033410380 (WhatsApp only) or jiyere@yahoo.com