Findings have shown that about $18 billion representing 90 percent of the estimated $20 billion Nigeria’s diaspora remittances in 2023 did not end up in the country.
This disclosure was made by the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele.
The World Bank had estimated that diaspora remittances to Nigeria in 2023 was $20 billion.
But, speaking in a panel discussion at the 2024 Economic Outlook and Budget Analysis organised by the Lagos Chamber of Commerce and Industry (LCCI), Oyedele estimated that more than 90 percent of the remittances were externalized.
According to him, “In our interactions with multinationals, rating agencies and other stakeholders, many of them said to us that exchange rate difficulty is more than 50 percent of all the challenges in Nigeria combined, as far as they are concerned. So, this is a major issue that we have to address.
“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). 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.”
“The World Bank said for 2023, our diaspora remittance was about $20 billion. We estimate that more than 90 percent of that did not get to Nigeria, they are being externalized. We have spoken to loads of Nigerians almost everywhere, in the US, UK, etc. They told us how they send remittances. 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.”
Earlier in his welcome address, LCCI President, Mr Gabriel Idahosa, said policy reforms by the government, especially the removal of fuel subsidies and floating of the exchange rate, are expected to boost fiscal revenue and contribute moderately to the improvement of the country’s growth this year.
Also speaking at the event, Director General, Budget Office, Ben Akabueze, said one of the challenges facing the nation is that of low public revenue against a growing population, adding that Nigeria has had over three decades of deficit budget.