Enough of Nigeria’s dependence on Diaspora remittances
October 19, 2021671 views0 comments
By Adolphus Aletor
Case of Nigerian Government and Diaspora Remittances (2)
The issue of remittances in Nigeria dates back to the early ’60s when the first set of Nigerians that went abroad attempted to salvage the plight and economic status of those back home. Since there was no significant difference in the value of Naira to the dollar, it was not much of a big deal until the late 80s during the era of General Ibrahim Babangida. That was when the Naira was first devalued and Nigerians abroad realized the wisdom of sending a few dollars home only to be compensated with multiple Naira. In an article credited to a former finance minister, Anthony Ani, the use of IMTOs like Western Union and MoneyGram contributed to the success experienced at the time, as many Nigerians that live abroad willingly sent money to their wards back home for one purpose or the other.
In searching for the meaning of Diaspora, I found the one by dictionary.com very interesting. It describes it as “any group that has been dispersed outside its traditional homeland, especially involuntarily, as Africans during the trans-Atlantic slave trade”. The dictionary may have attributed early migration to the trans-Atlantic slave trade but the Nigerian diaspora had its reason for migration. The existence of the Nigeria diaspora can be described under the following category;
Those with a quest for higher learning travelled abroad and upon realization of the environmental comparative advantage, decided not to return after their education. This set of people remained in their country of study to build that nation rather than return to help build Nigeria.
Those who travelled to seek a better life and to break their family away from poverty. This set of people are composed of non, partially and fully educated individuals. They simply travelled to make money to live a good life. There is no demographic, ethnocultural, geographical or religious limitation for those in this group.
Those whose migration was instigated by the ruling military junta. This set of people were composed of professionals, politicians, business owners etc. While some returned after the junta, many had established themselves and decided to build a future for their family.
Those that belong to the middle class feel that their continued stay in Nigeria will not give their children a global competitive edge. These sets are relocating in droves, moving families and getting settled permanently abroad and hoping that their children would become global citizens.
Those youths with or without employment, skilled or unskilled, feel that the Nigerian polity has drowned their voices and that the gerontocratic leadership leaves them no room to blossom.
Those that are well to do, influential and live in affluence but have travelled to secure health insurance for their old age. This set of people believe that the health care system in Nigeria cannot support their old age and would rather relocate to where it would cost them next to nothing to enjoy life when they become senior citizens.
Those who are young professionals and are being enticed daily by global technology companies. It is not uncommon today to find young Nigerians relocating abroad to work for technology or technology-driven companies like Andela, Google, Microsoft etc.
Those professionals whose skills are in global, high demands and claim to be frustrated and whose continuous cries for government intervention for better welfare have been ignored.
These categories share a common denominator in the failure of government and leaders to project hope and faith in the country of Nigeria. Their departure or migration would then easily fall under involuntary status. Of interest to me was the word “involuntary” in the above definition, and that is the deep and inner rationale of this article.
Focusing on Diaspora remittances is not bad as we have seen countries like India and Bangladesh generate and support their local economy with this source of fx revenue. The ratio of remittances to GDP of these countries tells of the impact, which if well harnessed could lead to great advantage. However, Nigeria’s current attention, dependence and recognition, leading to an established rule of appropriation in terms of channels, rate of exchange coupled with some strategic policies to drive its continuous and enhanced flow into the country is what gives concern and should be reviewed for the following reasons.
Firstly, the diaspora is made up of people who have taken their destiny into their hands. While Nigerian government leaders struggle to meet their obligation to the citizens, the issues of trust between the people and government have waned over the years. Many people now have the cause to deal with the government, based on conspiracy theories. For instance, there is a conspiracy theory that a few Nigerians are on a journey to cripple the educational system of Nigeria arising from the use of outdated curriculum, quota system, poor funding of the education sector, prolonged strike in the sector with agitators left unattended, etc. While the rich spend so much to educate their children abroad, or where they do not want to go abroad, patronize schools with foreign curriculum in Nigeria, public schools that most of us attended are left to become sheds, cisterns and dilapidated structures.
Secondly, the diaspora is made up of people who out of frustration, moved on to justify their training sacrifices by way of earning commensurate remuneration and to compete with their peers across the globe. They abhor the flagrant disregard for their skills locally when they are in high demand abroad. They claim that the arrogant and insincere attitude of the government towards their plight does not encourage further commitment. For instance, a serving minister claimed that there were enough doctors in Nigeria and those desiring to migrate should do so with all pleasure. Recently, a foreign government conducted interviews for skilled workers within Nigeria to employ them to work abroad.
Thirdly, it is common in certain parts of Nigeria for parents and family members to put pressure on younger family members to travel as it is seen as a sign of success. In such instances, victims have had to illegally usurp common family wealth to pursue their dream and when they do this, they take the tortuous path of crossing to Europe on land. While some succeed, many others fail and return empty and if unlucky, die in transit.
This is one side of the story of the diaspora! The other story is that of those who left either as foreign affairs employees under the FGN civil service or those on cross-posting under private sector employment. However, those who decided to take their destiny into their hands constitute the majority and are mostly responsible for the remittances that the federal government not only plans to use as a source of foreign exchange, but also use to defend the naira. Earlier statistics in this article showed that in the year 2020, the decline in the remittance to Nigeria, was so significant that it led to a 28% decline in the sub-region and without which the region would have recorded a 2.3% growth. That is how hard our brothers toil abroad to give us a good life back home. Though many claim that it is beer parlour discussion, the word on the street is that it favours the diaspora to send a few dollars for so much Naira. So, the federal government’s continuous recognition and dependence on diaspora remittance in addition to using it to defend the Naira is a battle that successive governments have fought without victory and which requires a different strategy.
Coming next is the concluding part 3 of this article, whose part 1 looked at global facts. The third part of this article addresses my recommendations with potential to solve issues around diaspora remittances shortfall, alternate channels and the right exchange rate that is expected to engender prosperity for both the FG and the citizens.
Adolphus Aletor, FCA, MCIB, a banker and finance analyst, is the managing director/CEO, Rigo Microfinance Bank; he can be reached on +2348033410380 (WhatsApp only) or firstname.lastname@example.org
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