Diaspora Nigerians sent $277bn home in 14 years

Nigerians in Diaspora have in the past 14 years supported the local economy with cumulative remittances in excess of $277.3 billion, BusinessDay checks reveal.

The leading countries worldwide by value of migrant remittances into Nigeria are United States of America, Switzerland, Germany, Russia and China, according to analysis by the Global Knowledge Partnership on Migration and Development (KNOMAD) and PricewaterhouseCoopers (PwC).

Trends watch on the migrants’ remittance inflows from 2005 to 2018 shows Nigerians in Diaspora sent an estimated $25 billion in remittances to the country in 2018.

In 2005, it was $14.64 billion; 2006 ($16.93 billion); 2007 ($18.014 billion); 2008 ($19.203 billion); 2009 ($18.368 billion); 2010 ($19.745 billion); and in 2011, it was $20.617 billion.
Further check reveals that in 2012, Nigerians in Diaspora sent home $20.543 billion; in 2013 they sent $20.797 billion; 2014 ($20.806 billion); 2015 ($21.158 billion); 2016 ($19.679 billion), and in 2017, total remittances stood at $22.001 billion.

The World Bank predicts growth in sub-Saharan Africa to rise to 3.4 percent due to improved investment in large economies and continued robust growth in non-resource intensive countries.

The $25 billion sent home by those in diaspora represents 6.1 percent of Nigeria’s GDP, according to PwC Nigeria in its recently released report titled ‘Nigeria Economic Outlook-Top 10 themes to watch out for in 2019’.

The record level of Diaspora remittance to Nigeria in 2018 “translates to 83 percent of the Federal Government budget in 2018 and 11 times the Foreign Direct Investment (FDI) flows in the same period,” PwC Nigeria noted in the report by Andrew S. Nevin, partner and chief economist, and Omosomi Omomia, senior industry associate.

“Nigeria’s migrant remittance inflows were also 7 times larger than the net official development assistance (foreign aid) received in 2017 of $3.359 billion,” it said.

Global foreign direct investment (FDI) flows fell by 19 percent in 2018. However, 2018 FDI flows to Africa increased by 6 percent, from $38 billion to $40 billion, the report said.

South Africa grew by 446 percent; Egypt by 7 percent. Nigeria, on the other hand, fell by 36 percent (to $2.2 billion) and was overtaken by Ghana with $3.3 billion.

“Election uncertainty coupled with lacklustre execution of policy reforms impacts FPI and FDI inflow. Key drivers for the market from first-half of 2019 will be commodity prices, exchange rate movement and stability; and inflation rate,” PwC said in the report.

“In 2018 we predicted a moderate increase in foreign portfolio investment (FPI) and a slowdown by half-year (HY) 2018, driven by uncertainty ahead of the elections. We expect FPI growth in half-year 2019 to remain low and lower than pre-2018 level.

“We expect FDI flows to be dampened by lacklustre implementation of policy reforms. Key risks to foreign investment include: declining interest rate differentials as advanced economies continue to tighten policy rates; political instability following the 2019 elections; unfavourable investment climate; and broad macroeconomic instability,” it further noted.

The report noted that Nigeria is not among the fastest growing economies in sub-Saharan Africa (SSA) by percentage growth in GDP. It said the largest economies in SSA offer opportunities for business growth, particularly when considering an expansion into new regions.

“Economic growth is still sluggish characterised by lacklustre recovery. Real GDP growth is expected to grow slightly to 2.5 percent year-on-year (y/y) on moderate improvements in net exports and domestic demand. Depressed oil demand coupled with production supply cuts and price fluctuations will impact the economy’s growth trajectory. The investment climate will also be dampened in the short-term by uncertainty usually associated with the pre and post-election cycles in the country,” it said.

 

Iheanyi Nwachukwu