Since many transactions are unrecorded or take place through informal channels, the actual amount of remittance flows into the country is arguably higher.
Migrant remittances were 77.2% of the federal government's budget in 2018 and more than 10 times the foreign direct investment (FDI) flows in the same period, according to PwC's latest White Paper Series, Strength from Abroad: The Economic Power of Nigeria's diaspora.
PwC estimated that migrant remittances to Nigeria could grow to $25.5 billion, $29.8 billion and $34.8 billion in 2019, 2021 and 2023 respectively.
Over a 15-year period, PwC said it expected total remittance flows to Nigeria to grow by almost double in size from $18.37 billion in 2009 to $34.89 billion in 2023.
Dr.Andrew S. Nevin, Partner and Chief Economist, explained, "The report is an analysis which shows the critical importance of the diaspora to Nigeria’s economy. The recently established Nigerians in Diaspora Commission (NiDCOM) led by Abike Dabiri-Erewa, indicates that the Federal Government recognizes the strategic importance of the Nigerian diaspora. The key next steps for the newly established Commission is to formulate and execute a strategy to maximize the benefits of Nigeria’s diaspora.
"In addition, we’re very keen to see State Governments start to engage the diaspora. The primary benefits of remittances to recipient households is the improvement in their general welfare, and studies show that 70% of remittances are used for consumption purposes, while 30% of remittance funds go to investment-related uses. So it is important that Nigeria has a diaspora strategy both at the national and state level.
According to the report, Nigeria accounts for over a third of migrant remittance flows to Sub-Saharan Africa. Egypt and Nigeria account for the largest inflows of remittances into Africa in 2018. In 2017, Nigeria led the Continent in terms of remittance receipts but dropped to second place behind Egypt in 2018.
It said, "For four consecutive years, official remittances have exceeded Nigeria's oil revenues. Since many transactions are unrecorded or take place through informal channels, the actual amount of remittance flows into the country is arguably higher."
PwC, therefore, recommended the need to create platforms that increase the accessibility of crucial information for Nigerians in the diaspora; encourage and create pooled investment vehicles, and early-stage businesses with smaller financing needs, presents a great opportunity for those in the diaspora to invest through angel networks.