Experts in the industry sector of the economy have urged the Central Bank of Nigeria (CBN) to create fund channels for enterpreneurs through remittances from Nigerians in the diaspora.
They also wanted the apex bank to properly engage the Nigerian diasporans on funding for Nigerian capital projects amid Nigeria’s fiscal crisis and rising budget deficits.
“There is need to form a funding ecosystem with Nigerian diasporans to support enterpreneurs and capital projects,” an economist, Godswil Obele, said.
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Obele stressed that diaspora funding can do more in welfare economy, which he said was mere sending money for family needs.
He said, “There is need for a proper organisation of that channel to get funds, which runs into billions of dollars. The Central Bank of Nigeria has to take that decision and engage that segment properly.”
Also, an economist and Chief Executive Officer of Diary Hills, Kevin Emmanuel, said that beyond having an enterpreneurship pool for diaspora remittances, the government needed to focus on foreign direct investments.
“The most critical decision the Central Bank needs to take in terms of attracting FDIs is exchange rate convergence,” Emmanuel said.
He added that the apex bank also needed to focus on primary and secondary layers of its commodities through backward integration and processing of its primary commodities.
Diaspora remittance to Nigeria is one of the fastest means of foreign exchange receipts in Nigeria. The practice is, however, mostly focused on welfare economics than offering a wealth creation platform for entrepreneurship.
THE ICIR findings showed that Nigerian population in the diaspora remitted $60.22 billion in the last three years to boost economic activities and the nation’s external reserves.
This is according to data from the World Bank and Budget Office of the Federation.
The World Bank revealed that diaspora remittances into Nigeria were estimated at $23.81bn in 2019. In its 2023–2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the Ministry of Finance, Budget and National Planning disclosed that diaspora remittances were $17.21bn in 2020 and $19.2bn in 2021.
Before 2020, Nigeria’s remittance inflows had only fallen below $20bn once, when it fell to $19.7bn in 2016.
According to the budget office, diaspora remittances were among top sources of non-oil foreign exchange for the nation. It explained that a string of policies from the CBN was responsible for increased inflows of diaspora remittances into the nation in 2021.
It stated that the nation was banking on improved diaspora remittances in 2022 to reverse the decline in its foreign reserves and strengthen its current account balance. The office clarified that the continuous decline in the nation’s external reserves level was because the CBN was intervening in the official market in a bid to stabilise the exchange rate. Another reason was the nation’s failure to meet its crude oil production quota, the office noted.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.