Central Bank of Nigeria (CBN) data shows monthly diaspora remittances surged to a record $947 million, nearing the regulatory target of $1 billion per month. The increase in remittances is a positive sign for the Nigerian economy.
The surge in remittances reflects the growing confidence of the diaspora in Nigeria’s economic prospects. The funds provide a vital source of foreign exchange and support household consumption. The CBN’s target of $1 billion per month is within reach, and the continued growth of remittances could help to stabilise the naira and support economic growth. For a family in Lagos receiving remittances, the funds are a lifeline. For the Nigerian economy, they are a vital source of foreign exchange.
The winners: the Nigerian economy, which benefits from increased foreign exchange; and Nigerian households, which receive vital support. The losers: those who do not receive remittances; and the Nigerian government, which must ensure that the funds are used productively.
Bottom Line: Diaspora remittances are at a record high. Nigerians abroad are sending money home. The question is whether the funds will be used to support investment or just consumption.