Nigeria’s diaspora remittance will shrink, says Okoroafor
Managing Director of Hobark Consultant Management Services and Founder, Mepon Limited, Dr. Emmanuel Okoroafor, speaks on the importance of Nigeria’s diaspora remittance earnings to the economy, especially now that the value of the naira and earning from oil are declining, warning of an impending threat to these much-needed earnings due to the United States’ anti-immigration policy as well as other factors; hence the need to rejig the economy.
What is the statistics of Nigerians in the Diaspora and what is the strength of their remittance back home?
Recent statistics from the federal government affirmed that the number of Nigerians in the Diaspora is around 15 million. This is huge, considering that it is bigger than the combined population of many countries around the world.
There is another side of the coin, because the number provided is a far cry from the real figure of Nigerians outside the shores of the country. The quest for survival and a better life has lent impetus to the human instinct for migration. Economic hardship of recent times is driving uncountable Nigerians to leave the country in droves.
A recent survey showed that almost half of Nigerian adults have indicated willingness to leave the country in the next few years. While the 1980s and early 1990s were the era of exodus of professionals, leading to brain drain, the migration in the past 10 years was undertaken mostly by unskilled and half-educated Nigerians, who are more desperate and therefore prepared to face dangerous experiences just to get out of the country to Europe and other parts of the world.
Unlike the early generation that migrated legitimately and via legitimate routes, our youths are resorting to irregular migration. Aside from the danger of drowning in the Mediterranean Sea and the peril of the Sahara Desert, most of them are trapped in Libya, where they are subjected to unimaginable atrocities.
Nigerians were one of the largest groups of victims of Libya’s modern slave market who were incarcerated in camps and sold in open markets. According to records, over 5,500 Nigerians were trapped in Libya while attempting to reach Europe.
Similarly, Nigerians constitute one of the largest groups of Africans trapped in the xenophobic web of South Africa last year. While some came back home, others chose to stay back.
These examples point to the humongous size of Nigerians who have left home. Our diaspora community is made up of legal and illegal migrants and the federal government’s record certainly does not take into account the illegal migrants.
How would you rate the remittance presently and its importance to the country’s economy?
There is no doubt that the Nigerian diaspora is one hugely underrated source of foreign exchange earnings for Nigeria. In fact, the country reaps double foreign exchange from remittances of its citizens abroad more than what is accrued from its crude oil exports.
Yet, even with this immense input, we are still being solely regarded internationally as a major oil-exporting country and a petrodollar economy since the 1970s. Figures have been provided to back this fact.
For instance, in terms of annual emigration, the total number of Nigerian immigrants grew from 448,500 in 1990 to 1.3 million in 2017, and counting. In 2018, diaspora remittances to Nigeria equalled $25 billion, representing 6.1 per cent of GDP. This translates to 83 per cent of the federal government’s budget in 2018 and 11 times the FDI ﬂow in the same period.
Nigeria’s remittance inﬂow was also seven times larger than the net ofﬁcial development assistance (foreign aid) received in 2017 ($3.4 billion).
Are you saying human resources are our biggest export?
Without any doubt, Nigerian migrants translate to our biggest export, not oil, as is being touted. In order words, Nigeria is not an oil economy; how can we be described as so when our biggest export is human resources, and with huge revenues, diaspora remittances more than $20 billion yearly?
In light of this, does it make sense that Nigeria, which has long (10 years ago) instituted local content policy and directives and continues to shout about it at every opportunity, let alone export and promote local content to other African countries, where there are large Nigerian migrant populations?
Nigerians working for multinationals in some African countries have been made redundant for reasons of local content, and still, there are Nigerian officials falling over themselves to preach local content in those same countries. Only an unwise man advises the world to restrict and or ban his greatest export.
What then can the federal government do to change this?
Basically, Nigeria should rethink and revise the strategy of propagating local content. The idea and benefits have already been sold to Nigerians and institutionalised via National Petroleum Investment Management Services (NAPIMS) and the Department of Petroleum Resources (DPR).
The time is ripe to give local content a low profile, so as to prevent putting Nigeria’s greatest export under threat. To this end, Nigerian officials should be discouraged from talking about local content at international conferences and instead focus on our strength.
Would you then advise Nigeria to rely on diaspora remittances instead of oil?
No, we shouldn’t rely solely on diaspora remittances, because the growth in remittances is subject to global economic forces, which could spur or hinder growth of remittance ﬂows.
Other factors that will drive remittance ﬂows include growth in emigration rate, economic conditions of the resident countries and the economic fundamentals in the Nigerian economy. Currently, many countries are closing their doors to immigrants and this is affecting our migrants.
The US immigrations recently revealed that due to the restriction on US visa as part of the Trump administration anti-immigration policy, the largest global drop-off in visitors to America was recorded from Nigeria. This should cause a sober reflection in the country and tell us that diaspora remittances may not continue to grow and may even shrink.
With a population of over 200 million people, Nigeria is the biggest market on this continent, and this should be a big leverage for the government. Attention should be placed on technology and capacity building and all foreign companies doing business in Nigeria must set up a factory or workshop to manufacture from here.
Some of these companies have assembling plants here in Nigeria?
(Cuts in) It is not enough to just set up assembling plants; plants that use local resources to manufacture components and parts for local assembly and/or for export are needed, and Nigerian factories being included in the supply chain of multinational conglomerates are welcome.
Nigeria should emulate what South Korea, China and other developing nations did or are doing by focusing on technology capacity building relevant to the 21st Century to help her become industrialised and a prosperous nation, with multiple streams of income, not just oil and diaspora remittances.
This would help cater for Nigerians and reduce brain drain and illegal immigration. In order not to put her greatest export and associated remittances under threat, given the projected strong regional economic growth and large intra-regional migration ﬂows from the Sub-Sahara African region, Nigeria must also be seen to welcome and accommodate foreigners. Their terms and conditions of employment made to match those of locals in similar employment or roles, partly to avoid undercutting the local workforce and partly to avoid local workforce feeling undervalued.
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