MoneyGram ex-country director, Mrs. Joke Giwa, has called for collaboration between the Nigerian government and Nigerians in Diaspora so as to improve the country’s foreign reserves.
Mrs. Joke Giwa made the call at an international conference where she was spotted by journalists.
“It is believed that an increased collaboration between the various Diaspora organizations and the formal sectors of government (especially the financial sector) will result in increased foreign exchange inflow from Nigerian Diaspora into the country.
“The rapid migration of Nigerian professionals which some have termed as ‘brain drain has helped in strengthening the income earning patterns of the Nigerian Diaspora. As a significant portion of the Diaspora community consist of better educated, and better trained professional, with access to higher paid jobs, the median income levels continues to rise.
“This, coupled with the typically strong family ties of our travelling majority, continues to push funding potential.,” she said.
She explained that the remittance flow is largely informal, and only collaboration across boards would pull the country out of economic doldrums and set about development.
According to Giwa, “in Nigeria a large percentage (over 60%) of remittance flows is still in the informal sector. The migration of these potential flows, from the informal into the formal sector, will require a combination of initiatives from both the Money Transfer Operators (MTOs) such as Money Gram and Westerner Union and the regulatory environment.
“This in turn provides secure measures for our growing Diaspora to offer significant opportunities to improve economic development through the remittance market by: Increasing direct investments, improving access to foreign capital markets through investment funds and Diaspora bonds, providing grants for development, establishing contacts to promote trade and investment, increasing demand for a country’s exports, transferring technology through, for example, professional associations that provide expertise to origin-country firms, temporary assignments of skilled expatriates in origin countries, and the return of emigrants with enhanced skills.”
She further explained that “however, these sums when aggregated come to significant amounts of foreign exchange funds inflow for the nation. These transfers are typically recurrent payments by migrant workers.
“In Nigeria, we don’t really have reliable data on the number of our citizens that are living outside the country. The estimates vary from 7 million to 17miliion depending on the source of your data. Due to the fact large number of informal Diaspora, I believe 17million (about 10% of the population) is a fair estimate to work with.
“In 2015, the top 10 remittance recipients were: India ($72.2bn), China ($63.9bn), the Philippines ($29.7bn), Mexico ($25.7bn), France ($24.6bn), Nigeria ($20.8bn), the Arab Republic of Egypt ($20.4bn), Pakistan ($20.1bn), Germany ($17.5bn), Bangladesh ($15.8bn).”
She reiterated that remittances have had an impact on Nigeria’s economy but it remains an unnoticed area of foreign capital, adding that it could be more beneficial if the money could be invested for long run return.
“Nigerian banks can use remittances (which represent a hard-currency asset for the bank) as collateral as long as it is able to pay out local currency remittances to beneficiaries.
“The banks need to encourage the recipients to pass the funds through formal channels by reducing cost of transactions and ensuring convenience for receivers.
“There should be adequate banking infrastructure in the areas with high density of recipients.
“A Nigerian Diaspora organization should be created. This organization will liaise with the Nigerian government directly about Diaspora affairs on how to use and manage the Nigerian Diaspora talent and resources as a source of fund inflow into the country,” Giwa advised.
Research has shown that Nigeria accounts for 2% of global remittances, while 65% of inflows to Sub-saharan Africa terminate in Nigeria.
The country is by far the largest receiver of remittances in Sub-Saharan Africa and is the sixth global remittance recipient in the world with formal in-flows projected to reach $21bn by end of 2016 according to the World Bank data. Putting $21bn remittance value into context, the Nigerian government has recently proposed a national budget of $31bn for 2016.
Perfectly acceptable, however, Giwa said it could be better if government made policies that would engender collaboration between its agencies and Diaspora Organizations, adding that Nigerians in the Diaspora need to know that remitted funds are being applied to good use.