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.
According to Vanguard, Oyedele made this statement during a panel discussion at the 2024 Economic Outlook and Budget Analysis event organized by the Lagos Chamber of Commerce and Industry.
He noted that the World Bank had initially projected diaspora remittances to Nigeria in 2023 to be $20 billion.
According to Oyedele, the majority of remittances are being externalized due to the use of parallel market rates by Nigerians residing abroad.
His words: “In our interactions with multinationals, rating agencies and other stakeholders, many of them said to us that exchange rate difficulty is more than 50 percent of all the challenges in Nigeria combined, as far as they are concerned. So, this is a major issue that we have to address.
“And we thought it is going to be an area where we can easily demonstrate how the monetary and fiscal policies can work together.
“So, to that extent, we have done a sensible amount of work on the fiscal side. And we have been speaking to the Central Bank of Nigeria (CBN).
“The ultimate objective being that, first and foremost, we think that the biggest problem we have is the fact that we have divergence in exchange rates.”
“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. We have spoken to loads of Nigerians almost everywhere, in the US, UK, etc.
“They told us how they send remittance. They use Apps, and we have tried some of those Apps, they use parallel market rates. So, you take $1,000 in New York, and tap on your phone that you are sending $1,000 to someone, a Fintech, they pay the Naira equivalent in Nigeria without bringing the dollars, unless of course if the source of the money is illicit.”
Oyedele revealed that 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.
