Only 10% diaspora remittances made it to Nigeria, 90% externalised
By Jeph Ajobaju, Chief Copy Editor
About $18 billion or 90 per cent of estimated $20 billion Nigeria’s diaspora remittances last year did not get to the country, even though the World Bank estimated diaspora remittances to Nigeria in 2023 was $20 billion.
Taiwo Oyedele, Presidential Committee on Fiscal Policy and Tax Reforms Chairman, explained at the 2024 Economic Outlook and Budget Analysis organised by the Lagos Chamber of Commerce and Industry (LCCI) that more than 90 per cent of the remittances were externalised.
“In our interactions with multinationals, rating agencies and other stakeholders, many of them said to us that exchange rate difficulty is more than 50 per cent of all the challenges in Nigeria combined, as far as they are concerned. So, this is a major issue that we have to address,” he said.
“And we thought it is going to be an area where we can easily demonstrate how the monetary and fiscal policies can work together. So, to that extent, we have done a sensible amount of work on the fiscal side. And we have been speaking to the Central Bank of Nigeria (CBN).
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Problem of divergence in exchange rates
“The ultimate objective being that, first and foremost, we think that the biggest problem we have is the fact that we have divergence in exchange rates,” Oyedele added, per Vanguard.
“The World Bank said for 2023, our diaspora remittance was about $20 billion. We estimate that more than 90 per cent of that did not get to Nigeria, they are being externalised.
“We have spoken to loads of Nigerians almost everywhere, in the US, UK, etc. They told us how they send remittance. They use Apps, and we have tried some of those Apps, they use parallel market rates.
“So, you take $1,000 in New York, and tap on your phone that you are sending $1,000 to someone, a Fintech, they pay the naira equivalent in Nigeria without bringing the dollars, unless of course if the source of the money is illicit.”
LCCI President Gabriel Idahosa reiterated policy reforms by the government, especially the removal of fuel subsidy and floating of the exchange rate, are expected to boost fiscal revenue and contribute moderately to the improvement of economic growth this year.
Budget Office Director General Ben Akabueze insisted the challenges facing Nigeria include low public revenue against a growing population, occasioning more than three decades of budget deficit.
