As growing discontentment over governance and structure of the polity grows and as well, brought to the fore by the recent #EndSARS protests, some stakeholders say the fragile economy and tension can only be arrested by a surge in remittances by Nigerians in Diaspora, Foreign Direct Investments, (FDIs) as well their participation in governance, among others.
But, they were quick to add that only socio-political stability, synergy between the monetary and fiscal policy measures and good governance that could engender confidence are needed to attract investments for growth and development.
Their expectation is that some of the viruses plaquing the polity such as ethnicity, corruption, nepotism would not affect them much having stayed away from the country at least for a while.
Also, the allegation of collaboration between some officials of the Central Bank of Nigeria, federal ministry of finance, deposit money banks and Western Union/MoneyGram to the fact that some of these funds which have become catalysts for growth in some countries, were in the past not retained in the country, must be looked into with a view to investigating the infractions, punish the alleged money launder. This will lead to recovery of past Diaspora remittances retained abroad and plug the loopholes.
For instance Nigeria is said to have received $96 billion diaspora remittances inflow in 6-years
In 2018, migrant remittances to Nigeria equaled US$25 billion, representing 6.1% of GDP. This also represents 14% year-on-year growth from the $22 billion receipt in 2017. The 2018 figure translates to 83% of the Federal Government budget in 2018 and 11 times the FDI flows in the same period.
Similarly, Nigeria’s migrant remittance inflow was also 7 times larger than the net official development assistance (foreign aid) received in 2017 of $3.359 billion.
In fact, recently President Muhammadu Buhari affirmed the growing importance of Diaspora remittances to the growth and development of the economy based on 2019 figures released by the World Bank. In the affirmation, Buhari said: “$25 billion annual remittance by Nigerians in the Diaspora was more than 80 percent of the country’s annual budget and formed about six percent of the Gross Domestic Product (GDP)”.
The stakeholders say the affirmation of the humungous Diaspora remittance amount should be a trigger for policy change on Diaspora matters and a precursor to considering a review of how Diaspora remittances can contribute to the growth of the economy, in the face of dwindling revenue.
Their argument is predicated on the expectation that FDI flows would be dampened by lackluster implementation of policy reforms.
They listed the policies which they see as Key risks to foreign investment ad lack of policy thrust for the Diaspora Commission, policy inconsistency by CBN and sometimes conflicting as well lack of synergy with the fiscal policies, political and broad macroeconomic instability,’’
The oil-driven economy is vulnerable to external shocks due to fluctuating prices, while oil production curve continues to slope downward and below the 2 million bpd average target set by the central government, not even talking of the decision of the Organisation of Petroleum Exporting Countries (OPEC) to reduce Nigeria’s oil production level to 1.685 million bpd.
The oil-driven economy is vulnerable to external shocks due to fluctuating prices, while oil production curve continues to slope downward and below the 2 million bpd average target set by the central government, not even talking of the decision of the Organisation of Petroleum Exporting Countries (OPEC) to reduce Nigeria’s oil production level to 1.685 million bpd.
But. Bimbo Folayan, a Nigerian in Diaspora believes that remittances and investments by Nigerians in Diaspora should be of great assistance, particularly this period of crisis.
Folayan, Former chair, Central Association of Nigerians in UK, who spoke with Arise Television recently said despite all the external ingredients for development, the fact remains that apart from the police brutality, Nigerians are equally brutal to each other, querying the rationale for burning of private businesses.
He advised that Nigeria should pursue and follow truth to its logical conclusion particularly as it relates to the ongoing inquiries into causes of protests that resulted in killings and destruction of property.
He agreed that identifying the culprits and punishing them would instill confidence in both foreign and local investors.
Folayan, who is the Executive Director of J Williamz Limited, promoters of the Nigerian Diaspora Direct Investment Summit (NDDIS), an organization which mobilizes Nigerians in the Diaspora and other British and international investors to invest in Nigeria, added that the experiences of some prospective foreign investors whom they brought to the country but were caught in the recent protests were discouraging, adding, “What would have happened to the investments if they were touched by the protesters.“
Former Minister of External Affairs Professor Bolaji Akinyemi who criticized President Buhari’s handling of the international community’s involvement in the #EndSARS protests expresses confidence that the Nigerians in Diaspora “who may have not been infested by the ethnicity and religious viruses.“
Although he acknowledged that they may not be completely immused as citizens of the country, Akinyemi, who spoke to Arise Television, was optimistic that their nationalistic and patriotic zear would be higher.
“I think, more than ever before, our salvation as a country lies with our citizens in Diaspora for much needed funds as well as making themselves available for leadership. I think the combination of these youths eith those in Diaspora could mean a lot for the country in terms of funds and leadership, “ he said.
On president Buhari’s admonition of the members of the international community, many of whom expressed concern about the ongoing development in Nigeria to seek to know all the facts available before taking a position or rushing to judgement and making hasty pronouncements, Akinyemi however, observed that the president should have been more civil in the way he addressed the international community.
“I don’t think it is helpful when a head of state decides to demonise the international community, telling them to basically mind their business because they do not know what they are talking about.
So when the international community gets involved, it’s better if you are to disagree with them, its better to do so in a civil way. If i were writing that speech, I wouldn’t have written it that way,” he said.
The former minister also made reference to the alleged laundering of remitted funds, saying, he is not an economist, but that there is need for transparency to engender confidence.
So when the international community gets involved, it’s better if you are to disagree with them, its better to do so in a civil way. If i were writing that speech, I wouldn’t have written it that way,” he said.
The former minister also made reference to the alleged laundering of remitted funds, saying, he is not an economist, but that there is need for transparency to engender confidence.
Specifically, a former Minister of Finance, Anthony Ani, had queried the huge sum alleged to be missing through diaspora remittances.
Ani, who alleged massive foreign exchange laundering in banks, explained that in 1995 the Ministry of Finance reviewed the country’s sources of foreign revenues and found that nothing was coming in from Nigerians in the Diaspora, whereas India and Jamaica were living on foreign exchange from their citizens abroad.
According to Ani “The fact is that the Diaspora remittances are not retained in Nigeria and there is a collaboration between the CBN, Nigerian banks and Western Union/MoneyGram; in such an event, government must investigate the infraction, punish the money launders, and recover all past Diaspora remittances retained abroad!”
Ani, who alleged massive foreign exchange laundering in banks, explained that in 1995 the Ministry of Finance reviewed the country’s sources of foreign revenues and found that nothing was coming in from Nigerians in the Diaspora, whereas India and Jamaica were living on foreign exchange from their citizens abroad.
According to Ani “The fact is that the Diaspora remittances are not retained in Nigeria and there is a collaboration between the CBN, Nigerian banks and Western Union/MoneyGram; in such an event, government must investigate the infraction, punish the money launders, and recover all past Diaspora remittances retained abroad!”
Friday Ameh, energy consultant made reference to recent clarification by CBN to the effect that $2.6bn as against $26bn was remitted, adding, “this suggests that we may not be totally free from the virus.“
Although some of the stakeholders acknowledged that some progress may have been made with the enabling Act setting up the Nigerians In Diaspora Commission (NIDCOM),much can still be achieved in the area of Diaspora remittances program if an expanded responsibility is developed for NIDCOM.
This is because a number of countries have used Diaspora remittances as deliberate economic policy which encourage their citizens to embark on economic migration.
Philippines is reputed to be the world’s third highest net Diaspora remittance recipient country in which remittance is more than 10% of GDP. In 2018 and 2019 Diasporas remittance of Filipinos was $28.9 billion and $30.1 billion respectively. Filipino Diaspora have become a major factor in the economic and social life of Philippines as a country and Filipino economic migration is a government policy.
Also, in India, Non-resident Indians (NRI) remittance contributions to the India GDP stood at 3.4% in 2018 and still constitutes a major part of the country’s overall economic development, standing at $79billion in 2019,followed by China and Mexico $67 billion and $36 billion respectively. .
In a similar vein, Pakistan Remittance Initiative has significantly attracted higher remittances from Pakistani Diaspora. The State Bank of Pakistan in its 2019 report expects an average of $20billion per year in a sustainable basis in Diaspora remittance which is considered important for overall macroeconomic stability and their positive impacts in improving lives of millions of Pakistani families.
Consequently, they submit that Nigeria can at this period of slow economic growth and dwindling revenue reinvent her Diaspora remittance strategies by learning from experiences of other countries. The activities of NIDCOM can be expanded to include developing projects to harness the potential of overseas remittances for poverty reduction and local economic development. This may include mass housing development and small-scale industries project in various states.
In a similar vein, Pakistan Remittance Initiative has significantly attracted higher remittances from Pakistani Diaspora. The State Bank of Pakistan in its 2019 report expects an average of $20billion per year in a sustainable basis in Diaspora remittance which is considered important for overall macroeconomic stability and their positive impacts in improving lives of millions of Pakistani families.
Consequently, they submit that Nigeria can at this period of slow economic growth and dwindling revenue reinvent her Diaspora remittance strategies by learning from experiences of other countries. The activities of NIDCOM can be expanded to include developing projects to harness the potential of overseas remittances for poverty reduction and local economic development. This may include mass housing development and small-scale industries project in various states.
To achieve this, they advise that NIDCOM should create a Diaspora Investment Development Division (DIDD) whose focus should be the development of platform for Nigerian overseas to invest their remittances on physical asset development.
A special purpose Diaspora Bond can also be issued via the capital market processes.
Goverent’s deliberate policy to allow NIDCOM to establish a Nigeria Diaspora Remittance Company exclusively for remittance of funds to Nigeria at zero fees, thereby eliminating high transfer fees being charged by MoneyGram, WesternUnion, World Remit and other private sector remittance companies currently operating in Nigeria could be another means of encouraging remittances and enhancing the growth and development of the country.