Undeterred by the security challenges the country is presently wading through, Nigerians in the Diaspora continued to remit billions of dollars into their motherland on yearly basis.
Next to petrodollars, the second biggest source of foreign exchange earnings for Nigeria is remittance from Nigerians from abroad.
Between 2011 to June 2014, Nigerians in the Diaspora had remitted about $63.17 billion (N10.35 trillion) into the country.
Analysis of remittances showed that S11billion (N1.8 trillion) was remitted in 2011; $21 billion (N3.44 trillion) in 2012, $20.77 billion (N3.40 trillion) in 2013 and $10.40 billion (N1.7 trillion) in the first half of 2014.
The World Bank equally attested to Nigeria’s might in terms of remittances from her citizens abroad as the country was ranked number five globally next to China, India, Philippines and Mexico.
According to the World Bank in 2012, Nigerians living abroad remitted $21billion home to rank among citizens of the top five countries that remit about $530 billion to their countries with India topping the chart with $70 billion, followed by china’s China $66 billion and the Philippines and Mexico holding a bracket of $24 billion respectively.
Nigerians’ 21 billion remittance in 2012 is an impressive showing of 91 per cent increase over $11 billion in 2011.
In the report, remittances were projected to grow by 7.9% in 2013; 10.1% in 2014 and 10.7% in 2015 to reach $534 billion by 2015.
Noting that Nigerians in the Diaspora contribute more to the nation’s economy than 34 of the country’s 36 states, the World Bank’s Remittances Unit showed that only Lagos and Rivers States have higher Gross Domestic Products (GDP) than the amount remitted back home by the Diasporas.
“Lagos State has a GDP of $33.67 billion, while Rivers State has $21.07 billion, which is just slightly higher than the amount the Diaspora sent back in 2012,” the bank said.
The World Bank also reports that in many low and middle-income countries worldwide, remittances made up a sizeable share of GDP, accounting for as much as 30 per cent in some cases.
While remittances are said to account for 5 per cent of total national GDP, the bank stated that key among the Nigerian Diaspora communities were those of the US and the UK, which remitted back $12.26 billion and $7.76 billion respectively in 2012.
This feat was made feasible due to the sizeable number of Nigerians living in the Diaspora. Although there is no definite record of how many Nigerians are in the Diaspora as confirmed by the chairman of Nigerian Diaspora Affairs, Mrs Abike Dabiri-Erewa, when she succinctly put it that “We don’t know how many Nigerians live abroad.”
However, a private study revealed that no fewer than 17.5 million Nigerians are residing in foreign lands with the UK and the USA having more than 2 million Nigerians each in their domains.
Notwithstanding the fact that the government lacked accurate figure of its citizens abroad, the impacts of the estimated Diaspora Nigerians in their domiciled countries cannot be down played, showing further that if this avenue is fully harnessed, the Nigerian economy will be better off.
US President Barak Obama also attested to the important role Nigerians in the Diaspora are playing in the Nigerian economy.
At a US-Nigeria Trade and Investment Forum organised by the Nigerians in the Diaspora Organisation (NIDOA) in Washington DC, President Obama, who was represented by Ambassador Eunice Reddick, a top official of the US Department, said that the Diaspora can play an important role in contributing to a strong, vibrant and economically prosperous Nigeria.
Despite the contribution of Nigerians abroad to its foreign exchange inflow, it’s rather sad that the real impact of such overseas income is hardly felt in infrastructure provision, neither is it very visible in other vital economic indices.
Most of the foreign remittances are deployed to fund private consumption, with the bulk of the foreign currencies ended up in the black market due to the low exchange rate of the Nigerian currency.
Analysts were of the opinion that the remittances are largely personal transactions from migrants to their friends and families, and are thus likely to be well targeted to the needs of their recipients.
Also, the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, in her analysis of the character of remittances, stated that they were mainly going to families, friends and communities, medical mission and provision of scholarships.
According to the World Bank, some of the money sent home by the Nigerian the Diaspora is going into informal socio-economic development activities like payment for services like health, housing, business start-ups and education.
A report from the bank’s Population Reference Bureau said most of the money sub-Saharan migrant workers send home is spent on education, health care, buying land, building houses, starting business or improving farms.
Because of the concern that a significant amount of remittances sent by the Diaspora is used for direct consumption without getting into long term investment and savings, thus diminishing the money’s impact on the development of Nigeria, the Federal Government, through the Debt Management Office (DMO) had proposed a $300 million Diaspora Bond, targeted at Nigerians in the Diaspora, which is expected to have a maturity period of between five to seven years.
It is hoped that with the availability of an official channel of investing remittances from abroad, chances are that the much needed infrastructural development of the economy will be an accomplished task while the multiplier effects of such developmental spending will go a long way in reducing level of poverty in Nigeria.
According to the Director-General of the DMO, Dr Abraham Nwankwo, “The bonds are tax-exempted, implying bigger income for the investors; the bonds provide an alternative investment to equities, real estate and bank deposits. Bonds can also be used as collateral for borrowing from banks and discount houses, and bonds can be sold either through any of the 21 PDMMs licensed by the DMO or on the floor of the NSE.”
Besides this, the Federal Mortgage Bank of Nigeria has also proposed a mortgage scheme for Nigerians in the Diaspora to own their choice homes in Nigeria and thereby mobilising foreign funds directly into the mainstream economy.
Lofty as these moves seem, the pertinent issue is the readiness of the government to explore the economic potential of Nigerians in the Diaspora in the socio-economic development of Nigeria.
Recognising the fact that the country needed a new template for Diaspora engagement, Dr Okonjo-Iweala recently led a high level executive-legislative team to Nigerians in Europe and the United States with a view to having a series of interactive sessions with them.
The members of the National Assembly in the team are Senator Ahmed Makarfi, Chairman, Senate Committee on Finance; Senator E. Uzamere, Chairman, Senate Committee on Local and Foreign Debts; Senator Ita Enang, Chairman, Senate Committee on Appropriation; Honourable Adeyinka Ajayi, Chairman, House Committee on Aid, Loans and Debt Management; Honourable Famurewa Ajibola Israel, House Committee on Diaspora; Honourable Abdulrahman Terab, House Committee on Finance and Honourable Emmanuel David Ombugadu, House Committee on Appropriation.
The meeting provided an avenue for the CME and the other members of the team to update Nigerians in the Diaspora on the developments in the Nigerian economy, the major achievements of the Transformation Agenda under the Administration of President Goodluck Jonathan and the opportunities available in Nigeria for the Diasporas.
It is expected that through these sessions, Nigerians in the Diaspora will be better informed about developments in the country and be encouraged to contribute in various ways to the development of the economy and nation-building in general
All stakeholders in the Nigerian economy recognised the important role remittances from foreign lands can play, however, how much of success the Okonjo-Iweala team can achieve depends on the level of mutual trust between the government and Nigerians in the Diaspora.
For the dollars, pounds and other foreign currencies to exchange hands for developmental purposes, there is need for continuous dialogue with the Diasporas, this goal the Federal Government must pursue tenaciously.
Will this present dialogue with Nigerians in the Diaspora be a continuous one? Can the government sustain this new found relationship?
Positive responses to these posers will go a long way in determining whether Nigeria is ready to unlock the developmental potential offered by the Diaspora Nigerians or not.
