Economic Impact of Diaspora Remittance on Nigerian Economy

Abstract

The purpose of this paper is to assess the huge impact of Diaspora remittance on the Nigerian economy. In 2018, migrant remittances to Nigeria were $24.3 billion, representing 6.1% of gross domestic product. This figure represents 83% of the Federal Government budget in 2018 and 11 times the Foreign Direct Investment (FDI) flows in same period. Remittances are the fastest growing source of foreign exchange earnings in Nigeria. Hence in March 2021, as part of its reforms to boost the inflow of foreign currency in the country, the Central Bank of Nigeria (CBN) introduced an incentive of N5 for every $1 of fund remitted to Nigeria through International Money Transfer Organisations in its forex policy. Remittances, or money transfers, make up the second-largest source of foreign exchange receipts after oil revenue in Nigeria, Africa's biggest economy. $24.8billion was sent to Nigeria in 2019, according to the World Bank data.