Migrant remittances to Nigeria could grow to $25.5bn, $29.8bn and $34.8bn in 2019, 2021 and 2023 respectively, estimates PwC in its latest white paper series, “Strength from Abroad: The Economic Power of Nigeria’s diaspora.”
Over a 15-year period, PwC expects total remittance flows to Nigeria to grow by almost double in size from $18.37 billion in 2009 to $34.89 billion in 2023.
According to the report, migrant remittances was 77.2 percent of the federal government budget in 2018 and more than 10 times the FDI flows in the same period.
Andrew S. Nevin(PhD), partner & chief economist, says: The report is an analysis which shows the critical importance of the diaspora to Nigeria’s economy.
The recently established Nigerians in Diaspora Commission (NiDCOM) led by Abike Dabiri-Erewa, indicates that the federal government recognises the strategic importance of the Nigerian diaspora.
The key next steps for the newly established commission is to formulate and execute a strategy to maximise the benefits of Nigeria’s diaspora, Nevin advised.
In addition, he said “we’re very keen to see state governments start to engage the diaspora. The primary benefits of remittances to recipient households is the improvement in their general welfare, and studies show that 70 percent of remittances are used for consumption purposes, while 30 percent of remittance funds go to investment-related uses. So it is important that Nigeria has a diaspora strategy both at the national and state level.”
Remittance flows to Africa
The report indicates that Nigeria accounts for over a third of migrant remittance flows to Sub-Saharan Africa.
Egypt and Nigeria account for the largest inflows of remittances into Africa in 2018. In 2017, Nigeria led the Continent in terms of remittance receipts but dropped to second place behind Egypt in 2018.
Nigerian diaspora remittance is also described as a contribution to national development
For four consecutive years, official remittances have exceeded Nigeria’s oil revenues. Since many transactions are unrecorded or take place through informal channels, the actual amount of remittance flows into the country is arguably higher.
Recommendations
Giving recommendations to harness the potentials of remittances, PwC is advocating for the creation of platforms that increases accessibility of crucial information for Nigerians in the diaspora.
The firm is also calling for the encouragement and creation of pooled investment vehicles.
“Early-stage businesses with smaller financing needs, presents a great opportunity for those in the diaspora to invest through angel networks,” the report added.
