Earlier this week, the World Bank’s global migration and remittances report indicated that funds remitted globally rebounded 7.0% in 2017 to $613bn. Remittances to Sub-Saharan Africa (SSA) accelerated 11.4% to $38 billion, supported by an uptick in the global economy, especially in the high-income OECD countries with the stability in commodity prices providing further support. However, the costs involved remained prohibitively high; in Q1-18, average global cost of sending $200 to SSA was 9.4%, far from the global average of 7.1% and the United Nation’s Sustainable Development Goal target of 3.0%.
Specifically, remittance to Nigeria came in as the fifth largest in the world and the largest in SSA at $22bn, Senegal and Ghana trailed at $2.2bn each. It must be noted that this excludes the volume of remittance that goes through informal channels which were mostly unaccounted for. This phenomenon not only signifies how globalization as eased movements of factors of production but also the magnitude foreign currency inflow from the diaspora community.
We highlight the huge potential inherentthe diaspora community for domestic infrastructural development. This was explored in mid-2017 through the issuance of the first-ever Federal Government of Nigeria Diaspora bond which was oversubscribed by 130 %. To further support the domestic currency, government effort to ease the prohibitive cost of remitting money into Nigeria would be helpful.