Over 80 per cent of Diaspora remittances to Nigeria in 2019 (about $14..17 billion), was spent on household consumptions, the National Bureau of Statistics (NBS) has said.
It disclosed that a total sum of $17.57 billion was sent home by Nigerians living abroad in the review year.
In its National Living Standards Survey Report for 2018-2019, NBS also reported that only 8.8 per cent of the Diaspora remittances was spent on school fees, 5.2 per cent on hospital bills, 1.0 per cent on agricultural input, and 4.3 per cent on other ventures.
According to PricewaterHouse Cooper (PwC), Nigeria receives the second largest diaspora remittances on the African continent, even as it accounts for over a third of the total migrant remittance inflows to the Sub-Saharan Africa. PwC estimated that these flows represented 6.1 per cent of Nigeria’s GDP.
The 2018 migrant remittances translates to 83 per cent of the Federal Government budget in 2018 and 11 times the Foreign Direct Investment flows in the same period.
Nigeria’s remittance inflows was also 7.4 times larger than the net official development assistance (foreign aid) received in 2017, which as US$3.4billion. PwC estimates that migrant remittances to Nigeria could grow to US$29.8 billion and US$34.8 billion in 2021 and 2023 respectively.
The firm noted that for four years, official remittances into Nigeria have exceeded oil revenues. But many have argued that unlike India, Egypt, China, Mexico and others who are among the largest recipients of foreign remittances, Nigeria’s economy is not impacted by Diaspora remittances.
Reports by the United Nations Conference on Trade and Development on the impact of remittances on developing countries disclosed that for every $2 billion in remittances that entered the country, production in the economy increased by over $6.5 billion.
UNCTAD said nearly 30 per cent of remittances are used for the purpose of investment and construction of houses in Ghana.
Conversely, Nigeria’s foreign remittances that go into investment is less than 10 per cent . The Director General, Lagos Chamber of Commerce and Industry, Mr Muda Yusuf, traced the poor investment of diaspora remittances in Nigeria to lack of trust on the part of Nigerians based abroad.
He said:The bulk of remittances are meant for upkeep, the money is not the kind you can invest it is like $200 dollars and less, for aged parents and siblings. “Some of them try to invest, but there is problem of trust.”
Professor Leo Ukpong of the Department of Economics, University of Uyo supports the view, saying that over time, Nigerians abroad have been betrayed by home-based relatives who misused money sent for investment.
In order to increase diaspora investment, the Federal Government floated the diaspora bond, a government debt targeted at Nigerians living abroad.
In its pilot phase, the bond was oversubscribed by 130 per cent and the government raised over $300 million from it.