On a visit to the Federal Inland Revenue Service last week, a special advisor to the president said, according to local media reports, that inward remittances had reached US$35bn year-to-date. This steep increase from US$21bn the previous year comes as a surprise. We would have expected a fall, at least through reported channels due to the obvious temptation of remitting through the parallel market. A well-informed commentator has queried the figures on the grounds that the commercial bank with the largest branch network handles just US$300m per year.
A general data weakness in most developing countries and not just Nigeria is that banks are only required to keep very basic records of incoming remittances. The minimal change in annual inflows in the balance-of–payments (BoP) does point to gaps in the recording of transactions.
The more important point is that, wherever the transactions are posted in the BoP, the diaspora could receive incentives to invest in Nigeria.
The FGN could offer these incentives for its priority sectors with the highest potential to generate jobs (agriculture, manufacturing and mining). Alternatively, it could target those where prominent Nigerians have made their mark in business abroad such as hospitals, shopping malls and film. India offers a good case study of incentives for a huge diaspora.
The authorities could make it easier for the diaspora to invest. For example, registration of a new company with the Corporate Affairs Commission could also be handled by Nigerian embassies and consulates.
France is the only developed country to appear in the table. It is the only one therefore of the eight countries to record sizeable migrant outflows, which amounted to US$12.7bn in 2015.