Ikeja Market, Lagos. About 70 per cent of remittances are used for consumption purposes, while 30 per cent of remittance funds went to investment-related use, experts say/Photo: Femi Awoniyi

Nigeria’s diaspora remittances to hit $22bn – Report

Nigeria’s diaspora remittances have been projected to rise by five per cent to $22bn by the end of 2021.

Agusto Consulting Limited, a wholly owned subsidiary of a rating agency, Agusto & Co. Limited, disclosed this in its report titled ‘2021 Nigeria diaspora remittance report & survey’ for May 2021.

The report was presented by the Managing Director, Yinka Adelekan, and the Head of Consulting, Jimi Ogbobine, during a virtual event on Tuesday.

Part of the report read, “We project that Nigeria’s diaspora remittances will reach $22bn by 2021, representing a year-on-year (y-o-y) rise of five per cent.

“And then a marginal year-on-year rise of two per cent in 2022 to $22.5bn.

Nigeria’s diaspora remittances dropped by 12 per cent to $21bn in 2020 from about $23.8bn the prior year, it stated.

The firm described remittances as funds transferred from migrants to their home country, and played important roles in the economy, helping to meet the basic needs of recipients

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According to the report, remittances represent household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies.

It said previous studies had shown that about 70 per cent of remittances were used for consumption purposes, while 30 per cent of remittance funds went to investment-related use.

The report said Nigeria’s domestic policy conundrum on foreign exchange was creating many challenges to the wider macro contractions caused by the pandemic.

It said the COVID-19 pandemic created significant global economic ruptures that had affected the rich world and the remittance dependent states.

Due to the crude oil volatility, it stated, the diaspora remittances which had long been Nigeria’s second largest source of foreign exchange inflows had become more significant.

Kola Tella

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