Family support accounts for 70 per cent of diaspora remittances to Nigeria – Osinbajo
Vice President, Prof. Yemi Osinbajo has said that about 70 per cent of remittances into Nigeria from Nigerians in the diaspora goes to family support, while only 30 per cent went into investments.
Osinbajo made the remarks at a virtual event themed: “The New CBN CX Policy and Positive Impact to Diaspora Investments in Nigeria”, organized by Fidelity Bank Plc, on Saturday, in Lagos.
Osinbajo, a special guest at the webinar, was represented by Ms Yewande Sadiko, the Managing Director and Chief Executive Officer of the Nigerian Investment Promotion Council (NIPC).
He said that diaspora remittances had continued to surpass oil revenue, translating to sometimes as high as six per cent of Gross Domestic Products (GDP).
“For several years, the remittances exceeded Nigeria’s oil revenue, translating, sometimes, as high as 6 per cent of GDP.
“The office of the Vice President, in collaboration with several stakeholders, including the NIPC, worked on a study in 2017 to help us better understand the potential of the Nigerians in diaspora investment group.
“We found that many Nigerians, particularly first-generation males, have a keen interest in the economy and in fact many investors, do portfolio investments and are interested in venturing beyond the Lagos investment area.
” We found that 70 per cent of the diaspora inflows that come into Nigeria, however, goes into family support and only 30 per cent of the inflows go towards investments,” Osinbajo said.
Stating that Nigerians in diaspora were a formidable force with a ‘can-do’ spirit, he said they should focus more on specific investments opportunities, channeled through the right platforms.
“Nigerians in diaspora should engage in more specific investments that promotes investments opportunities led by the private sector.
“What they ask for from government is improvements in the enabling business environment and this administration’s efforts over the years has been to improve the business environment.
“An initiative such as this webinar, driven by the private sector to attract investments from the diaspora is one of the key things they asked for.
“So, we are delighted with the new CBN policy that makes it easier for diaspora Nigerians, not just to transfer funds to Nigeria but, to have greater value over the funds that they transfer.
“I know when the data are released, we will see the impact that it has had on the diaspora remittances from Nigerians to Nigeria,” he added.
Mrs Abike Dabiri-Erewa, Chairman/CEO, Nigerians in Diaspora Commission (NIDCOM) said that the new CBN CX policy would greatly impact on the remittances of Nigerians in diaspora to the country.
“Considering the enormous potential we have as Nigerians in diaspora, NIDCOM was set up, a one-stop agency for Nigerians in the diaspora.
“On the issue of remittances, the CBN FX policy indicates that as a Nigerian in diaspora you send in your money and get it in the currencies you sent it in.
“I must say this is a policy that will positively impact diaspora remittances into Nigeria.
“There are still some issues which we will continue to work out with the CBN, but the policy will change a lot of things as regards diaspora remittances,” she said.
She added that records had shown that between 12 to 13 million Nigerians lived in the diaspora, excluding African countries from which NIDCOM was working to get the accurate data of Nigerians.
Mr Godwin Emefiele, Governor of the CBN said that the new FX policy was as a result of CBN’s plan to broaden the scope and scale of diaspora inflows.
Emefiele said that the policy would ensure proper channeling of diaspora remittances, thereby eradicating informal channels which were fraud-prone.
“As we are aware, remittances from Nigerians living abroad has had significant benefits on domestic income, social welfare and economic growth in our country.
“Given the importance of Nigerians in the diaspora, keeping significant engagements with them is vital towards maximising the gains, to further benefit them and improve the economy.
“Remittance are less volatile when compared to other forms of investments such as portfolio investments which could be prone to sudden reversals and are influenced by foreign forces.
“Following the onset of COVID-19, emerging economies witnessed sudden reversals of over $100 billion worth of financial flows as investors retreated to seek safer havens assets, such as the United States treasury bill.
“Some analysts have expected a significant drop in remittances in emerging and frontier markets, as a result of the slow down of global growth during the first half of the year, which was not the case in countries such as Pakistan, Bangladesh, Mexico and India, where we saw a significant boost in diaspora remittances,” he said.
Emefiele added: “The increased flow of remittances helped in mitigating the negative effects of the pandemic and the outflow in portfolio funds in the respective economies.
”At the CBN, we understand the ramification for foreign exchange rate stability, reserved recreation, job creation. poverty reduction and economic growth.
“As a result, our policy aim is to broaden the scope and scale of diaspora inflows which ensures that those in diaspora leverage formal channels in remitting funds rather than the informal channels that are more prone to frauds and poor safeguards for consumers who utilize these services.
“One of the key elements in the Sustainable Development Goals (SDGs) is to increase the volume of global remittances as a percentage of GDP, while reducing the cost of remittances.
“As a result of the pandemic, global remittance flows to developing countries is estimated to fall by 7.2 per cent to $508 billion in 2020 and a further 7.5 per cent to $470 billion in 2021.
“Irrespective of the global fall in remittances, however, they remain a stable source of financing in developing countries,” he noted.
The CBN governor added: “According to the World Bank, flows to low and medium income countries reached a record high of $520 billion in 2019, this surpassed FDI flows of $537 billion and overseas remittance of about $166 billion.
“Consistent with the global trend, Nigerians aspire to ensure perimeter flows as World bank’s records show that Nigeria’s $21 billion remittances was the 7th largest remittances in 2019.
“Notwithstanding the impact of the pandemic in 2020, diaspora remittances maintained dominance over FDI.
“The efficiency of remittances, especially as provided by the international money transfers are critical to our aim of boosting the economy. Thus, we will continue to fine tune our policies to mitigate factors that affect the quality of service faced by customers when using IMTOs.
“If remittance infrastructure improves and the right policies are put in place, remittances will improve significantly, even though marred by irregularities.”
Dr Julius Kpaduwa, a California-based Gynecologist and member of the Nigerian Physicians in the Americas, commended the bank for making transactions across borders very easy and successful. (NAN)