According to a recent report from the World Bank, the Nigerian Diaspora community has sent a staggering amount of $168.33 billion back to their home country over the span of the past eight years. This remarkable figure highlights the significant contributions made by Nigerians living abroad in supporting their families and contributing to the country’s economy.
It is noteworthy that these remittances occurred during a period when foreign investments flowing into Nigeria faced considerable instability. The country experienced a scarcity of foreign currency, which, in turn, resulted in a sharp decline in the value of the Nigerian currency, the naira. Despite these challenges, the Nigerian Diaspora continued to demonstrate their commitment to their homeland by consistently sending money back to Nigeria.
This report sheds light on the resilience and determination of the Nigerian Diaspora community in supporting their families and contributing to the economic stability of their country, even in the face of adverse circumstances. It emphasizes the importance of their remittances as a vital source of financial support for families and as a significant contributor to the overall economy of Nigeria.
Based on information provided by the World Bank and the Budget Office of the Federation, it is evident that Nigeria has greatly benefited from the substantial contributions of remittances from its diaspora community. These remittances have played a crucial role in mitigating the negative impacts of foreign exchange scarcity and ensuring the stability of the country’s foreign exchange reserves.
Nigeria’s diaspora, comprising Nigerians living abroad, has been actively sending money back to their home country. These financial inflows from the diaspora have been instrumental in addressing the challenges posed by limited availability of foreign currency. The remittances have effectively supplemented the country’s foreign exchange reserves, preventing them from depleting and maintaining a steady flow of foreign currency into the Nigerian economy.
By relying on diaspora remittances, Nigeria has managed to alleviate the adverse consequences of foreign exchange scarcity. The country has faced difficulties in maintaining sufficient foreign currency reserves, which can hamper various sectors such as international trade, investment, and overall economic stability. However, the consistent inflow of remittances from Nigerians living abroad has acted as a buffer, compensating for the scarcity and ensuring a stable supply of foreign exchange.
Furthermore, these remittances have contributed to the overall economic well-being of Nigeria. The funds sent by the diaspora are often utilized for various purposes such as supporting families, investing in businesses, or financing education and healthcare. This injection of capital into the local economy has stimulated growth, generated employment opportunities, and enhanced the standard of living for many Nigerians.
Nigeria’s diaspora remittances have played a vital role in cushioning the negative effects of foreign exchange scarcity and maintaining the stability of the country’s foreign exchange reserves. These remittances have not only helped address the challenges posed by limited availability of foreign currency but have also contributed to the overall socio-economic development of Nigeria.
According to the World Bank’s report in 2022, remittances flowing to sub-Saharan Africa experienced a growth rate of 5.2%, reaching $53 billion. Among the countries in the region, Nigeria received the largest share of these remittances.
The data provided by the global bank reveals that between 2015 and 2022, Nigerians living abroad sent a total of $168.33 billion back home. A closer look at the figures shows that in 2015, remittances from the Nigerian diaspora amounted to $21.2 billion. This figure slightly declined to $19.7 billion in 2016 but then increased to $22 billion in 2017.
The report further highlights that in 2018, remittances reached $24.31 billion, but experienced a slight drop to $23.81 billion in 2019. Due to the COVID-19 pandemic, remittances fell significantly to $17.21 billion in 2020. However, they rebounded strongly in 2021, amounting to $19.2 billion. By 2022, the World Bank estimated that remittance inflows into Nigeria had reached $20.9 billion.
Before 2020, Nigeria’s remittance inflows had only dipped below $20 billion once, which occurred in 2016 when it amounted to $19.7 billion. The World Bank noted that in 2022, diaspora remittances were one of the primary sources of non-oil foreign exchange for Nigeria. The sustained increase in diaspora inflows since 2021 can be attributed to various new policies implemented by the Central Bank of Nigeria.
As of April 19, 2023, data from the Central Bank of Nigeria (CBN) indicated that Nigeria’s foreign exchange reserve stood at $34.43 billion. This represents an 18.4% increase from its value of $29.07 billion in 2015.