Remittances from Nigerians abroad hit a five-year high of $20.93 billion in 2024, showing the vital role the diaspora plays in the country’s economy. Despite the weakening naira, many continue to send money home due to family responsibilities and strong emotional ties, while fintech innovations have made transfers faster and easier.
According to africa.businessinsider, these remittances, which are often tiny sums given frequently, have grown to become a major pillar of Nigeria’s economy.
As an example, remittances reached a 5-year-high of $20.93 billion in 2024, underscoring a compelling narrative for Nigerians living abroad: emotional ties and family commitments often supersede economic logic.
The Nigerian Central Bank, which presented the statistics, attributed its policies to the basis for the increase.
CBN Governor Yemi Cardoso credited recent economic reforms for the surge in remittances, with monthly inflows rising from $250 million early in 2024 to $600 million by September, as per a report by BusinessDay.
The policies in question include the unification of exchange rate windows, the adoption of a market-driven rate regime, and the introduction of the Electronic Foreign Exchange Matching System (EFEMS) to enhance transparency and efficiency in the forex market.
However, government policies alone fail to rationalize Nigeria’s remarkable diaspora remittance, considering that the Naira depreciated by 40.9% over the same period, completing the year at N1,535 per US dollar.
In fact, it could be argued that the volatility of Nigeria’s financial market constitutes a roadblock, as highlighted by Ravi Jakhodia, CEO of Moniepoint GB, who, during an interview with Business Insider Africa, stated;
“What we have seen generally is that the diaspora in the UK does not want to hold their value in Naira, so they do just-in-time transfers when they really need to spend that money in Naira.”
“I think the challenge with Naira is that in the past it has depreciated a lot, and it also continues to be very volatile, which makes it difficult for people to plan and budget for,” he added.
Also, given that the country, prior to the policies touted, has historically boasted some of the world’s highest remittance figures, the idea that the CBN’s recent policies are the sole reasons for the significant amount Nigerians in diaspora sent back home doesn’t necessarily ring true.
A small sample size of Nigeria’s UK diaspora remittance in 2021 highlights this point.
During the year, as per the Migration Observatory in the UK, the Indian and Pakistani diaspora stood as the only countries to remit more money back home than Nigeria, at £4.46 billion and £2.94 billion respectively.
The Nigerian diaspora, on the other hand, remitted £2.76 billion, higher than France, Germany, and China, which had £2.46 billion, £1.67 billion, and £1.24 billion, respectively.
The figure above underscores Nigeria’s incessant need to send money back home, especially when you consider that in the period under review, Nigerians in the UK accounted for 270,768 of the region’s 67.0 million total population, compared to India’s 920,000 people, 1.5%, and Pakistan’s 624,000 (1.0%), as per the UK’s office for National Statistics.
“You can say I send around £500 monthly, I obviously give some to my mom, say maybe £150 to £200 to my mom, I also give some to my brother, and then there’s my cousin, her mom is currently struggling so I have to send her some money to help her mom,” Mira, a Nigerian health care worker who in 2023 migrated to the UK revealed to Business Insider Africa
