Approximately $18 billion out of the estimated $20 billion in diaspora remittances to Nigeria in 2023 did not reach the country, according to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.
Speaking during a panel discussion at the 2024 Economic Outlook and Budget Analysis event organized by the Lagos Chamber of Commerce and Industry, Oyedele highlighted that the World Bank had initially projected diaspora remittances to Nigeria in 2023 to be $20 billion.
The majority of remittances, Oyedele explained, are being externalized due to the use of parallel market rates by Nigerians residing abroad. He emphasized that exchange rate challenges contribute significantly to overall challenges faced by multinationals, rating agencies, and other stakeholders operating in Nigeria.
Addressing the issue, Oyedele stated, “The World Bank said for 2023, our diaspora remittance was about $20 billion. We estimate that more than 90 percent of that did not get to Nigeria, they are being externalized.”
He further explained that Nigerians abroad often use Apps, utilizing parallel market rates to send remittances. This process results in the payment of the Naira equivalent in Nigeria without the actual transfer of dollars, unless the source of the money is deemed illicit.
Oyedele revealed that the information was gathered from Nigerians residing in the US, UK, and other locations.
The President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, mentioned in his welcome address that government policy reforms, such as the removal of fuel subsidies and the floating of the exchange rate, were anticipated to enhance fiscal revenue and contribute to the country’s growth in the current year.
Ben Akabueze, the Director General of the Budget Office, also spoke at the event and highlighted the challenge of low public revenue against a growing population. He noted that Nigeria has faced over three decades of deficit budgets.