Importance of remittances for Nigerian economy

Importance of remittances for Nigerian economy

For countries like Nigeria, international remittances are identified as an important developmental tool for boosting the growth of its economy. Money sent through remittances by migrants is the largest source of foreign capital inflows for third world countries.

Nigeria has the highest number of migrants working abroad i.e. more than 18 Million. The economy of Nigeria is one of the fastest growing in Africa (merely behind Ghana & South Africa). In terms of GDP, it is the largest economy of Africa. It is also the top African country with respect to capital inflows from foreign countries.

As per the report of World Bank published in April 2018, $22 Billion were received by Nigeria from expatriates in the form of remittances (the fifth highest in the world). The said report also elaborated the fact that there was an increase of remittances by 6% witnessed in the year 2017. Further, an increase of 5% is expected in the remittances of foreign capital for Nigeria for the year 2018, thereby projecting an amount of $23 Billion.

Remittances form an integral part of the total foreign reserves for Nigeria. However, despite increased remittances in the past decade, poverty and inequality are prevalent here. In comparison to similar economies and parallel remittance numbers, the economies of Mexico and Philippines have prospered more than that of Nigeria.

One of the primary reasons for the same is the lack of robust financial regulations to curb terrorist financing and money laundering. It is no secret that in order for a remittance receiving country to reap the maximum benefits of this external stimulus, it is pertinent to have sound economic policies, stable exchange rates, good governance, reliable financial and legal institutions and other supportive policies and infrastructure in place.

Nigerian Central Bank needs to implement similar financial laws and regulations like that of Mexico or Philippines, in order to maximize the positive effects of monumental remittances on the overall economy and living standard of the masses.

We at Currency Tube are conversant with the importance of remittances as a developmental tool for Nigerian economy. Our vigorous regulatory standards coupled with great exchange rates provide our customers the best online facility for ensuring an easy, secure, cheap and reliable money transfer, ultimately ensuring the prosperity of Nigerian people.

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