By Dr. Ibrahim Modibbo
In the race towards globalization and multiculturalism in modern economies, consensus is built around strategic thinking for the common good of the people. Conscious of the enormity of myriad of problems confronting the Nigerian economy, the Apex Bank, Central Bank of Nigeria is strategizing with focus on exploring the threshold of the problems with a defined trajectory of revamping the economy. In a world increasingly driven by the movement of people, the financial contributions of Diasporas are becoming indispensable to many nations’ economic development. For Nigeria, a country with one of the largest diaspora populations globally, remittances should be considered as a critical lifeline, not only for millions of households but for the national economy. Recognizing this potential, the Central Bank of Nigeria (CBN) under the leadership of Governor Olayemi Cardoso has embarked on a strategic campaign to strengthen the ties between the Nigerian diaspora and the country’s financial system, with the objective of turning remittances nto a powerful engine for sustainable economic growth.
At the heart of this initiative is the CBN’s recent engagement in Houston, Texas, where the Deputy Governor (Economic Policy), Muhammad Sani Abdullahi, led a team of stakeholders in a forumtitled “Optimizing Remittances to Nigeria: A Vision for the Future.” The forum, which featured representatives from the Nigeria Inter-Bank Settlement System (NIBSS), major Nigerian banks, and International Money Transfer Operators (IMTOs), was part of a larger series of engagements to improve remittance flows and maximize their impact on Nigeria’s economic development.
Remittances are a crucial component of Nigeria’s economy, with the World Bank reporting average inflows of $20.5 billion annually over the past decade. However, much of this money is directed towards consumption, invest in infrastructure, real estate, and business ventures. These initiatives transformed remittances from a safety net into a source of capital that has helped modernize India’s economy, improve infrastructure, and boost employment.
Similarly, Mexico’s remittance inflows—largely from the United States— have been instrumental in reducing poverty and improving education and healthcare in rural areas. By fostering financial inclusion and providing investment opportunities, the Mexican government ensured that remittances were not just a stop-gap measure for consumption but also a foundation for long-term national development.
Nigeria can—and should—follow this examples. The bold step by Governor Cardoso and his team in initiating direct dialogue with the diaspora is a critical first move in this direction. With the right policies, including lower transfer costs, improved access to financial services, and incentives for investment, Nigeria could not only increase remittance inflows but also ensure they contribute to the country’s sustainable development.
One of the more immediate effects of harnessing remittances effectively is the potential impact on the value of the Naira. As more foreign currency flows into the country, the supply of foreign exchange increases, helping to
stabilize the local currency. With Nigeria’s current struggles with exchange
rate volatility, boosting remittance inflows could play a significant role in
strengthening the Naira.
Governor Cardoso’s strategic vision is timely. If, without targeted efforts,
Nigeria has been receiving $20.5 billion annually, there is no reason to believe that with proper engagement, these figures cannot double or even triple in the next few years. As the CBN continues its outreach to Nigerians
abroad, more opportunities will open up for the diaspora to contribute to
Nigeria’s development in meaningful ways.
This is a point some of us have been advocating for years: with the unprecedented number of Nigerians in the diaspora, if a proper roadshow and guidelines are put in place to encourage more remittances, it will not only boost development in the country but also strengthen the value of the Naira. Governor Cardoso’s initiative marks a pivotal moment in this ongoing
discussion and deserves applause for taking such a bold and innovative
step.
One of the key takeaways from the Houston forum is that collaboration is
crucial. No single institution can unlock the full value of remittances alone.
As noted by Dr. Oliver Alawuba, the Group Managing Director of UBA, the combined efforts of banks, regulators, fintechs, and international transfer operators are essential to creating an ecosystem where remittances can thrive. This is especially important as remittances transition from being a safety net for individual households to a tool for national development.
The collaboration among the stakeholders is key as seen at the Houston event, ensuring that remittances are not only easier to send but also more
cost-effective. By doing so, remittances can serve as a powerful instrument for financial inclusion, giving more Nigerians abroad access to banking services, savings products, and investment opportunities.
With the current initiative, the CBN is positioning Nigeria to unlock the full potential of its diaspora population. The $20.5 billion in annual remittances is just the beginning. This figure could easily skyrocket in the coming years, providing the necessary funds for infrastructure development, job creation, and overall economic growth.
The bold steps taken by Governor Cardoso and his team will soon mark a turning point in Nigeria’s economic journey. With the vision of transforming remittances from a tool of consumption to an instrument of development, the CBN is not only empowering the diaspora but also driving the nation towards a brighter, more prosperous future. This is an initiative that deserves both recognition and support.
Ibrahim Modibbo Ph.D, writes from Abuja, Nigeria
