Pan-African credit rating agency, Agusto & Co, has revealed that remittances from the diaspora continue to play an increasingly essential role in Nigeria’s economy, serving as an important source of foreign exchange earnings and a catalyst for economic growth and development.
Statistics show that Nigeria came second, behind Egypt in Africa, attracting $20.1 billion in 2021 as against Egypt’s $28.3 billion which was the highest in Africa.
The agency which disclosed this in a report tagged ‘Nigeria Diaspora Remittances: A Tale of Emigration, Policy and Technology’ predicted that remittance flows into the country may rise from $20.1 billion in 2021 to about $26 billion by 2025.
It added as more Nigerians, discouraged by the country’s gloomy economic conditions, look overseas for the opportunity, their remittances will continue to play a crucial role in sustaining the Nigerian economy.
“The growth of these funds has been exceptional, empowering dependents to meet their basic needs, pursue education, access healthcare, and embark on entrepreneurial endeavours,” the agency said.
According to Agusto, Nigeria has been dealing with the challenge of emigration and brain drain for decades because of the rising number of people fleeing in search of greener pastures amid the country’s dim economic prospects.
“This growing trend in emigration has been informally tagged “Japa” – a Yoruba word that translates to “flee or run away”.
As more countries, particularly highly sought-after destinations, have become more welcoming of immigrants because of the global labour shortage experienced post-COVID-19, there are now more opportunities than ever for migrants seeking employment in environments with improved economic and living conditions.
Agusto & Co. believes that the surge in emigration witnessed in 2022 is yet to translate to a commensurate rise in remittances as the majority of the emigrants are students who will not be able to fully join the labour force in their host countries until mid-2023,” the Agency said.