Remittance is simply any money received on a particular transaction or transfer especially from diaspora by the government of a country.
According to the The International Monetary Fund (IMF), "it stated that remittance is an inflow such as cash and non-monetary items which move through legal channels such as electronic wires or through informal channels such as money or goods carried across a country's border."
Based on the definition of remittance, we have to know how much Nigeria got as remittance from available data. We will then find out the impact of remittance on Nigeria's economic growth in this current outgoing year. It should be stated here that economic growth could either be positive or negative, based on prevailing factors.
In a data presented by the Central Bank of Nigeria (CBN) and Nairaltytics, Nigeria got $4.28 billion and $4.92 billion as remittances in the first and second quarters of 2021 respectively. The remittance figures however, for the first and second quarters of 2020 were $5.63 billion and $3.37 billion respectively.
A World Bank report titled, "Migration and Development Brief 35" projected Nigeria's overall remittances (from Quarter 1-4) for 2021 at $17.6 billion. The 2021 figure shows a 2.5 per cent increase from the 2020 figure of $16.94 billion. More so, Nigeria's 2021 remittance projection will account for 40 per cent of the overall remittance inflows into Sub-Saharan Africa.
The President Muhammadu Buhari led federal government would be expecting a higher remittance projection for 2022.
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| President Muhammadu Buhari |
Going forward, the crux of this article is to now x-ray the impact of remittance on Nigeria's economic growth in 2021. The inflow of remittance has driven Nigeria's economy in the right direction. Although, emerging factors such as the global COVID-19 pandemic, affected Nigerian professionals in diaspora, it however, did not bring about a fall in the 2021 remittance projection compared to last year. The impact of remittance had a multiplier effect on Nigeria's economic growth by a few per cent. Remittance was used for households' consumption, the education and health sectors, as well as financial development.
The trickling effects of all these included job creation, reduction in poverty and petty crimes. There could be an argument to why Nigeria's economy is not growing as it should. The spate of insecurity and aftermath of job losses due to COVID-19 are also clogs in the wheel to economic growth. An unfavourable factor such as COVID-19 had an adverse effect on Nigeria's 2021 remittance inflow.
For a developing country like Nigeria, a rise in yearly remittance is one of the vital drivers for a favourable economic growth, as long as there is accountability. Therefore, remittance inflow will continue to help stimulate Nigeria's economic growth recovery plans, and to maintain sustainable development, so far the government ensures leakages in the expenditure of remittance are blocked.
As Nigerians welcome another year, economic watchers and analysts will make projections using different indices for what the 2022 remittance would be at the end of the year. Barring severe effect of COVID-19 pandemic, and other unfavourable factors, Nigeria's 2022 remittance should increase by reasonable percentage compared to 2021. Therefore, an increase in remittance would be injected into germane sectors, in order to boost the nation's economy, and bring about positive economic growth.
Oladele Hakeem Olaniyan , who lives in Nigeria wrote this article.
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