Nigeria has been a member of the Organization of the Petroleum Exporting Countries(OPEC) since 1961. It would be wise to think exporting oil is its main GDP contributor. The fact…
Nigeria has been a member of the Organization of the Petroleum Exporting Countries(OPEC) since 1961. It would be wise to think exporting oil is its main GDP contributor. The fact is remittances from its diaspora increased by 19% to $24.3 billion in 2018. This is a new high for the Nigerian economy supposed to be oil-driven. Remittances from USA to Nigeria made up almost 30% of it. This is while crude oil exports fell by almost 30% during the same time.
Afrinvest, an investment firm, states that Nigerians in the United States are the main contributors to the remittance inflows.
What are the Absolute facts?
On the Oil-Driven Economy
Since joining the OPEC in 1971, Nigeria has seen little development economically other than in the last decade.
The highest oil output of 2464 barrels per day was attained in 2010. This was after heavy investment in oil-related infrastructure by foreign companies. With high fuel prices at the time, it seemed a step forward in the right direction. Fast forward just 7 years and you see the drop in production due to various reasons. Production reached a new low in 2017 when just 1738 barrels were produced per day by the OPEC nation.
On the Remittance front
“Nigerians living outside the country are the biggest export” according to the chief economist at PriceWaterCoopers (PwC) Nigeria, Prof Andrew Nevi. It is hard to not agree with him when the effect it has on the Nigerian economy is astounding. Out of $24.3 billion dollar remittance, almost $7.2 billion was remittances from USA to Nigeria. The increase of remittance flow by 20.8% makes the USA the highest remitting country to Nigeria.
What Do they Project?
Nigeria’s GDP growth jumped from 0.8% in 2017 to 1.9% at the end of 2018. This was still below the projected 2.3%, mainly due to variations in prices of crude oil and its output globally. Looking at the oil supply and demand on a global scale, there are various uncertainties. These are adversely affecting the Nigerian economy.
All this while the 3 million-strong Nigerian diaspora in the US contributes significantly to the growing economy. The remittances to Nigeria made up 83% of the federal government’s capital budget in 2018. $7.2 billion remitted by Nigerians in America was more than the entire capital expenditure for 2019. The capital expenditure of Nigeria stood at $6.7 billion for 2019. This is according to Afrinvest again.
Fast, convenient and affordable money transfer to Nigeria has always been a dream for Nigerian migrants living across the globe. Although the average remittance cost to Nigeria dropped to 10%…
Fast, convenient and affordable money transfer to Nigeria has always been a dream for Nigerian migrants living across the globe.
Although the average remittance cost to Nigeria dropped to 10% from 14% in 2008, it is still the highest in the world. Furthermore, all the Sub-Saharan nations suffer from the same problem. Nigeria’s share of overall remittances inflow has decreased, but that signifies something else. Irrespective of the high international transaction cost, other African countries have embraced the trend and are currently witnessing a boom in the remittance market.
For the largest economy in Africa – Nigeria – remittance is a major economic driver. In 2017, overall remittance revenue surpassed oil revenues of the so-called ‘oil-driven’ Nigerian economy by $2 billion. Moreover, the recorded remittance figure, as opposed to oil revenue, was considered being a conservative estimation. Reason being, only 40% of the Nigerians are banked.
Further, the rest 37% unbanked Nigerian population relies on the informal revenue inflow. This doesn’t mean that all of them are receiving remittances, however, a considerable amount of people do.
Among those, there are many who are skeptical about the regulated channel because of their distrust in the government and financial institutions. However, it is the responsibility of the government and the money transfer operators (MTO) to spread awareness about the services that provide affordable money transfer to Nigeria online. Such individuals and families must be made familiar with the benefits of online international transactions.
In this blog, we will lay down some points why Nigerians need to look a reliable and affordable platform to send money to Nigeria from USA one and how can they choose the best of them all.
1. Pay Less, Pay Smart – Choose Wisely
Gone are those days when you didn’t have any choice. Either there were limited banks or selected Money Transfer Operators. The digital world has eradicated all sorts of restrictions. Nowadays, just by browsing through the internet, one can easily compare one platform with the other and select the best one as per his or her specific requirements.
Removing the banks out of the question because of their exceptionally “generous” international transaction rates, an average affordable money transfer to Nigeria would cost anywhere from 5% to 7% of the total transaction.
But here‘s the problem!
While you are surfing through the internet, you may come across hundreds of money transfer platforms.
To ensure that it is a reliable platform, you must clarify the total transaction cost in advance. There are some platforms who do not include the currency exchange rates in their overall calculation. Such hidden fees could spoil your experience completely. So, beware!
However, FAZRemit ensures that for every money transfer to Nigeria from USA, the customer pays the lowest fee. Before making any transaction, you see the exact cost you want to pay, how much would your beneficiary get, and what would be your total cost.
If you are taking a regulated course for an international transaction to Nigerian from USA, that you always must, you will be required to submit your KYC documents. Physical presence within the working hours and waiting in line will also compromise your convenience. Why would you want to do it to yourself when you can do it at your own convenience?
Along with convenient and instant wire transfers, the price is also very important. All of them have their own significance. FAZRemit, therefore, facilitates the fastest money transfer services from the United States to Nigeria, Ghana and Kenya to ensure that you get the best experience within the affordable range that you seek!
3. Actively Participate in the Country’s Economic Development
You must always make money transfer through a licensed and regulated channel. This ensures the security of your funds. In a case, because of any reason, your funds do not reach to the beneficiary, you can have your money back. If not regulated, there is a possibility that you may not be able to get your hard-earned money back! Well, that’s a bummer!
There are many benefits to choose a registered platform. On a personal level, you can get the best and competitive services.
On the broader side, once you choose a formal channel of financial transaction, you become a part of the national economy. This helps the government to create more accurate statistics of money-flow.
The Federal Government of Nigeria, then, can use these statistics to develop better policies. This could benefit not just you, your family, your community, but the entire nation.
Although there are economic problems and challenges that the Nigerian government needs to solve. But, if you, the citizen, do not comply with the basic requirements of the government, the vicious cycle of blaming one another could continue endlessly!
4. Always Get the Best Because You Deserve it!
There is a neck-to-neck competition in the market. In the digital era, you, as a customer, are the most valuable asset that any service provider cherishes. While competing for the throne of service providers facilitating the most affordable money transfer to Nigeria, you can easily get the best in the market. All you need to do is – Explore!
Central Bank of Nigeria (CBN) is targeted to drop down the unbanked population from 37% to 20%. The remittance trend is shifting drastically. In the age of millennials, the world is moving towards a more accessible and better choice every single day. And, the government will play a decisive role if they want to promote this trend and prosper or slow their pace and fall behind the race in which they have already taken a good lead. With a decisive victory in Nigerian elections 2019, Mr. Buhari has undertaken this humongous responsibility and the entire world is watching.
Billions are pouring in the Nigerian remittance market every single day. Everyone wants ‘More’. So, why not take the full benefit of it and choose the service that provides the most affordable money transfer to Nigeria?
In 2018, Nigeria received the highest amount of remittances ($25 Billion) among all Sub-Saharan countries. The total amount sent home crossed $625 billion. Nigeria has always dominated this market by…
In 2018, Nigeria received the highest amount of remittances ($25 Billion) among all Sub-Saharan countries. The total amount sent home crossed $625 billion. Nigeria has always dominated this market by a considerable margin yet other Sub-Saharan countries like Ghana and Kenya are catching up. It can be estimated that money transfer from USA to Nigeria was worth $6.2 billion in total.
With a $400 billion GDP and receiving a considerably large amount of money inflow, the nation is still struggling with issues on multiple fronts. Booming poverty level, overpopulation, political instability, and socio-economic problems have been haunting the nation. Even if the money transfer operators and banks try to mend things in the remittance department, the country is far from completely overcoming its economic problems. In this blog, we will go through some major obstacles pulling down the Nigerian economy.
1. Informal Economy Overshadows Formal Economy
Nigerian individuals and citizen groups cannot trust the government, their financial institutions, and above all, their commitment to serve the country. Even at the time when online banking and online bill payment are considered the easiest, the number of unbanked and under-banked Nigerians is still very high.
This may not be the only reason for Nigerians not signing up for bank accounts and maintaining them. But the incompetent government infrastructure cannot cater to the needs of the general population. This is why a significant portion of the population opts for cash transactions.
This analysis also puts light on another side of the story. This means that the total remittances actually received by Nigerian citizens are far more than just the formal estimation.
De-risking was introduced to curb money-laundering but in turn, it caused havoc in the partially formal, and mostly under-banked Nigerian communities. CBN did license a limited number of operators to continue their operation in Nigeria after the social backlash. However, the damage was already done, and it was more like a damage-control move.
Instead of strengthening and guiding the bank account holders, this drastic step severely affected Nigerians, especially those with the lowest income and severe economic problems.
2. Bad Economic Policies of the Government
If corruption was not enough, disastrous economic policies and public disagreements between the Finance minister and CBN governer fuel the problem. Delay in important regulations, especially in the case of oil prices, and putting political interests in front of the national economy has contributed to pushing the Nigerian economic down south.
Federal government setting absurd prices of basic necessities like fuel has distributive effects on the overall economy. Direct intervention in the Nigerian market is also a major cause of distress. Instead of deciding what an individual can or cannot buy or sell by altering the value of goods and services, the government needs to ensure that it facilitates a healthy competition in the commercial market.
3. Induced Economic Problems
Because of the government’s lack of emphasis on allocating significant budget for education and health, 24% Nigerians are unemployed. This number worsens if we consider only Nigerian youth.
Unchecked corruption in education and health sector is pulling back the development agenda.
A majority of students coming out of Nigerian universities have, more or less, educational degrees in their hands but have very less to no professional skills.
Lack of medicines, inexperienced doctors and inadequate health facilities further leads to more economic problems faced by the poor.
The poor condition of oil fields in the Niger delta directly affects the inhabitants. Oil spillage affects the water, soil, and finally the health and economy of Nigerian agriculture. This has even led to a strong rebellion in the South. Insurgency is a major concern for the nation, and its root cause is the inability to satisfy the needs of the natives.
And when we consider its overall impact on the nation, the situation worsens.
4. Lack of Basic Amenities
Without sufficient electricity supply, and the electric department unequipped with the required skills, impacts foreign investment as well. Constant power failures, inability to nourish talent and to satisfy the natives as well as present and potential investors could be a deciding factor in worsening Nigerian economic problems. But a decisive government with sound decisions can change the tides.
Businesses and investors from across the globe vision Nigeria as a future economic giant because of the huge natural and human resources available at its disposal. It is the responsibility of the Federal Government of Nigeria to take well-calculated steps hereon. So, it would be interesting to see how Buhari’s government performs. Promises have been made by the head-of-the-state but would he be able to solve the economic problems of Nigeria? We will see in the upcoming days.
Instant money transfer to Nigeria helps remittance receivers of different backgrounds. Be it, individuals, businesses, government, or the overall national economy, inflow of $25 billion plays a crucial role in…
Instant money transfer to Nigeria helps remittance receivers of different backgrounds. Be it, individuals, businesses, government, or the overall national economy, inflow of $25 billion plays a crucial role in uplifting them all.
In this blog, we will look at how fast international transactions can help different Nigerian communities and the scenarios in which the need for a proper money transfer platform is a must!
Beneficiaries of Instant Money Transfer to Nigeria Online
1. Ease of Doing Business
Businesses can have easier cash flow management to distribute finance for receiving funds, paying off employees, and allocating budget.
Faster receipts, easier workflow, better operations, and certainty of financial transactions supports businesses to flourish.
2. For Individuals and Families
E-payments and well-equipped technical infrastructure save considerable cost and time. Indulging in other activities that matter the most, it empowers the ability of families to improve their standard of life.
Banks charge a very high transaction fee (over 10% of the total transaction) for international money transfer and may take days (sometimes more than a week) to process the transaction. Devaluation of reliability on public institutions is a major cause of people not opening their bank accounts in the first place. This is where the introduction of a fast and cheap money transfer service to Nigeria can bring a drastic change.
Encourages individuals to overcome their unbanked or underbanked status by introducing them to the benefits of becoming part of the mainstream economy.
3. Improvement in Remittance Market
Global competition among businesses operating in multiple countries is encouraging everyone to work on a seamless platform. Although speed is not the only factor. Security and transparency are other factors but undoubtedly this competition encourages both private as well as public financial institutions to provide a better service. This constantly improves the quality of money transfer services themselves as they try to outgrow their own achievements.
Overall quality services extend right from a customer’s first point of contact to maintaining a strong customer experience. Competitiveness results in a transition towards a better solution, especially for market segments (consumers) that are underprivileged. At the same time, every single industry is, in one way or another, impacted by the cross-border transfer of funds.
Overcoming Adverse Situations With Instant Money Transfer to Nigeria
1. For Timely Bill Payments
Ana actively credit-driven economy increases financial liquidity facilitating ease of doing transactions. However, the system can benefit only when the debts are paid within the agreed time. Inability to do so because of slow international money transfer to Nigeria attracts a hefty penalty which could take a toll on the overall budget.
For different individuals and organizations, the numbers may vary but the problem is the same!
To clear daily expenses, school or university fee, accommodation charges, pay mortgages et cetera, thousands of Nigerian look up to international remittances, which if not received in time could make a dent in the system as a whole.
This distrust in the credit-backed financial system can be detrimental for individuals in the short-term but for Nigeria as a whole.
2. To Cope Up With Emergency Situations
With the largest number of poor in the world, a significant Nigerian population relies on a hand-to-mouth lifestyle. For such people and families, financial aid from local public or private entities is not possible. Migrants who can send money to Nigeria instantly can be their only source of help. To overcome hospital bills or in case of a disaster, political instability, or terrorist attacks, receiving the aid within the right time could make a significant difference.
On the positive side, out of total bank account holders in Nigeria (49% of the total population), 23% indulge themselves in online bill payment. At the same time, air-time top-ups make 22%.
This, in turn, creates an opportunity for money transfer services to improve themselves and provide the best services. This is where FAZRemit takes the cake with their ‘instant money transfer to Nigeria from USA’ service at the cheapest rates.
To avail our services, simply register on FAZRemit, and send money to Nigeria from USA using the best online money transfer platform.
Nigeria, being the biggest remittance centre in the entire African sub-continent received more than $25 billion as remittances in 2018. Yet, 87 million Nigerians are living in extreme poverty which…
Nigeria, being the biggest remittance centre in the entire African sub-continent received more than $25 billion as remittances in 2018. Yet, 87 million Nigerians are living in extreme poverty which is the largest in the number.
Non-recipients of remittances have shown a negligible change from the state of poverty as compared to the families receiving remittances. Further, the recipients use this money to spend on basic household expenses.
Remittances uplift the overall standard of life. In that line, the recipients spend the financial aid on crucial social amenities including education, health, and better housing. Remittances allow Nigerian families to improve their creditworthiness and strengthen them to take part in the formal economy. Collectively, the overall nation benefits from this increased contribution.
So, what should be done?
The Nigerian government is yet to lay down specific policies to constructively use the revenue generated through remittance inflow. World Bank has also recommended the Nigerian government to strengthen its remittance policies by lowering the transaction costs. In the meantime, it is important to understand that things are not as simple as they sound. There are after-effects of every single decision. In the case of developing nations, they have to overcome the problem of brain-drain.
Even renowned global financial institutions have pointed out that the overall remittance trend is causing money-drain.
Educated Nigerian youth that returns to his or her own country, generally, prefers imported goods instead of local products and services. At the same time, one can argue that remittances help limited Nigerian families. But those who become successful, start getting attracted towards western culture. Consequently, their preferences and spending structure changes. And, a major part of the money starts flowing towards foreign investors instead of the national economy.
This is a concerning issue. However, in the short-term, especially in the current scenario, this influx could significantly help poor and struggling Nigerian families earn a piece of bread. To conclude that remittance alone can change the course of the downtrodden Nigerian economy would not be right. But in the end, it’s the Nigerian government that needs to take notable initiatives to strike a balance between the pros and cons of foreign aid, investment, and remittance.
It would be best for the Nigerian government to best let the remittance trend benefit its backward communities which are struggling the most. Lack of education is leading to unemployed people joining the rebels, especially in Southern Nigeria.
Coping up with insurgents would require more federal reserves to be allocated for security. The same security budget that exceeded $1.7 billion in 2017. If the same trend continues, it would continue to take its toll on the economy. Moreover, the Nigerian families that could be assisted sooner will keep suffering for a longer time. This would further stimulate more anger, distrust and feeling of rebellion among the common people. Hence, it is a vicious cycle that needs to be stopped as soon as possible.
Although this is just one of the many reasons, it is crucial for the government to control the situation now. To achieve that, the Government of Nigeria (GON) must check the fluctuation in social spending (budgets for education and health of Nigerian families).
Lastly, A Note for the Nigerian Families
At the same time, Nigerians need to actively participate in the Nigerian economy by limiting the use of cash. To understand the extent to which this can help on a global level:
Digital and cashless services, if accepted worldwide, can save enough revenue for 30 million books for schools and 20 million school uniforms in low-income nations. This can be a boon for at least 200,000 out of 12 million (highest in the world) out-of-school Nigerian children.
Although the government has a major role in uplifting the economy of the country, Nigerian migrants can also play their role by opting for the best money transfer services as the banks are unable to provide them with the same. To achieve this, FAZRemit provides the cheapest money transfer services to Nigeria from the USA. Because of the fastest transaction speed, FAZRemit ensures that every beneficiary receives the money at the right time. This could be just the first step towards revolutionizing the way migrants send money to Nigeria but it is undoubtedly the need of the hour.
Millennials want convenience. They are not at all interested in drafting an email with a subject, greetings, and salutation. Gone are those days when response time were days or even…
Millennials want convenience. They are not at all interested in drafting an email with a subject, greetings, and salutation. Gone are those days when response time were days or even hours apart. Being a service and quality centric generation, they need the resolution of their queries the fastest. Enter – Social Media Platforms.
Internet Revolution in Nigeria
Although Nigeria has always been the most active social media user in the entire African sub-continent. Since the time of Myspace, Nairaland, and Friendster, Nigerians have been keen users of social networks. This trend has continued, moreover exploded in the era of Facebook and Twitter.
Political entities, media houses, and individuals using these platforms have made an impact globally. Moreover, some of the most effective campaigns were born as social media amplified the voice of everyone with no restrictions. Some hashtags made their journey to become social movements such as #BringBackOurGirls, #CitizenSolutionToEndTerrorism, and #LightUpNigeria.
Nigerians Connected to Internet
As per the World Bank’s 2018 report, more than 37 million unbanked Nigerians are using cellular devices like mobile and tablets to connect to the World Wide Web. Although 55.3 million Nigerians who are already part of the banking system are contributing to the country’s revenue stream, public and private institutions are yet to tap the remaining 27 million population. Banking and financial institutions see this problem as an opportunity which in turn would not only help them grow but also uplift the overall economy of this developing country.
Online money transfer to Nigeria, contributing $25 billion, is playing a major role in this field. However, for achieving the aspirations of 200 million population whose median age is 17.9 years, it is essential for remittance service providers to deal with the audience in their own playground. And that is Social Media!
Nigerians on the Internet
It is estimated that by 2021, more than 150 million Nigerians will be connected to the internet. Although this number could also be possible because of the exponentially growing population of Nigeria that is currently 2.6% annually. However, as the new generation takes over, Nigerian Diaspora’s social media penetration would undoubtedly increase significantly.
Use of mobile wallets to send money to Nigeria online is on the rise as most of the internet users are hooked on to the social media platforms. 41 out of every 100 Nigerians use Facebook and WhatsApp which clearly indicates the enthusiasm of the young generation and their preference.
Nigerians and Social Media
Top 3 most-used platforms consist of Facebook-owned platforms, followed by YouTube. More E-commerce platforms and web-based payment gateways have followed this trend, and they are collaborating to avoid missing the golden chance. Nigerian Interbank Settlement System (NIBSS) indicated that in the first 9 months of 2018, Nigerian e-payment crossed 56.85 trillion Naira. This number exceeded the previous year’s record by 16.4 trillion Naira.
To achieve this feat, apart from the usual organic results and direct marketing, social media platforms played a major part. Right from brand awareness to increasing traffic, social media platforms have become an active lead and revenue generating sources. Furthermore, they are also an amazing relationship builder as it enhances customer satisfaction multifold.
Effective Social Media Advertising (SMA) and Social Media Marketing (SMM) strategies have resulted in a paradigmatic shift in the manner small to large-scale enterprises present themselves in the market.
As time goes by, the numbers will change. But it does not seem that the trend will show a negative sign, at least not anytime soon.
Nigerian General Elections 2019 Results were announced by the Election commission of Nigeria on Wednesday, February 27, 2019, stating All Progressives Congress (APC) candidate – Muhammadu Buhari – has been…
Nigerian General Elections 2019 Results were announced by the Election commission of Nigeria on Wednesday, February 27, 2019, stating All Progressives Congress (APC) candidate – Muhammadu Buhari – has been reelected as the president of Republic of Nigeria. Defeating Atiku Abubakar of People’s Democratic Party (PDP), Buhari took the crown in 19 states out of 37 with a vote difference of 3,928,869 votes. Other smaller parties like Africa Action Congress (AAC) put up a good fight in selected regions like Lagos where it secured 8,910 votes. Meanwhile, the Young Progressive Party (YPP) and Alliance for New Nigeria (ANN) collectively gathered 38,665 votes.
Nigerian citizens count on Buhari for taking strict actions against corruption as well before the election campaigning, he has been portraying himself as an anti-corruption crusader. However, the opposition had several questions for him. The presidential tenure that follows would be more challenging as many of Buhari’s own cabinet ministers and high-level officials have been charged for the same. At the same time, the public has been viewing these convictions as a positive sign of war against corruption.
Nigerian economy was negatively impacted in 2016 and since then, there has been a nominal growth in the overall economy. Meanwhile, the World Bank Organization is estimating GDP growth of merely 2.2% in the year 2019. At this rate, it would be extremely challenging for the Nigerian economy to roll repeat 2014 when it had crossed $550 billion.
According to Statista report, Nigeria will not be able to achieve that feat before 2021 but if things go as expected, before the next general elections in 2023, the biggest African economy – Nigeria – would cross the $650 billion mark.
Although GDP consists of multiple parameters, an immediate action strategy is expected, moreover, mandatory for the elected government in the following sectors.
Poverty and Illiteracy
The huge divide between urban and countryside Nigeria, when it comes to electricity and power, is enormous. National Bureau of Statistics (NBS) report states that even though 4 out of every 5 homes in cities and urban areas have electricity but out of the total rural families (which constitutes 64% of the total population of Nigeria), 2 out of every 3 do not.
Overtaking India, Nigeria has become the country with the largest population living under extreme poverty. According to a report in July 2018 by the World Poverty Clock, 86.9 million people have been affected by the curse of poverty and some major reasons include corruption and overpopulation in the country. It can hereby be concluded that the first Sustainable Development Goal (SDG) prepared by the United Nations, aiming to end poverty by 2030 seems too far-fetched, especially for African Nations including Nigeria and the Democratic Republic of Congo which is expected to be the next to follow the suite and replace India to take 2nd position in the ranking.
More than 70 million Nigerian citizens including 11 million out-of-school children, and 60 million youth and adults, are illiterate. Furthermore, orthodox systems and communal obligations apart from lack of government’s ability to implement the policies, is simply worsening the problem even further.
For a booming Nigerian population (increasing at 2.6% annual rate), fulfillment of fundamental requirements including food, shelter, and education is imperative. However, the worsening numbers is an indication for the upcoming Buhari’s governance to pay special heed.
Oil, Agriculture, and Remittances
The largest oil-producing country in Africa and the 6th largest oil producer in the world, the oil-driven economy of Nigeria needs to diversify.
Agriculture-sector needs special attention because the fertile land of Nigeria and the agriculture produce, due to lack of Agro-technology, are not able to feed the mouths. Once a leading food exporter, Nigeria today imports food from other countries. This points towards the negligence of duty by the Nigerian officials and policymakers who instead of extensively investing in oil should have been improving the agriculture sector as well.
At the same time, remittance inflow is playing a decisive role in keeping the economy afloat which is why it becomes essential for the Buhari government to promote international transactions and mobile payments. Those who want to send money to Nigeria online need easier and economically feasible platforms and the government must take encouraging steps for the money transfer services, businesses and investors to develop these services. Needless to say, there are plenty of other sectors that need more importance but ignoring the remittance industry would be a huge blunder for Muhammadu Buhari’s government.
Tensions and Violence
Nigerian general elections 2019 results came along with the announcement of the winner but there were more than 39 casualties and hundreds of arrests which is although less than the 2015 general elections (when almost 60 people died in 61 reported election-related violence), the country has a long way to go before conducting, what in a democratic nation is termed as, fair and safe elections. It would be expected from Buhari to keep aside the results, as he portrays himself as a law-abiding and honest person, and ensure that the hard-earned democracy is kept alive and prosperous.
As promised, Buhari has had a huge impact on the Islamic extremists, Boko Haram, in the North which is one of the biggest reasons for Nigerian voters vouching for him and giving an overwhelming mandate to APC in the 2019 general election.
However, the problem of southern insurgency still remains. This makes Nigerian economic diversification even more important as the insurgents since the 1990s simply do not want to be exploited. Buhari has promised to resolve the Niger Delta conflict soon, however, there is no definite timeframe decided. The unrest among minority ethnic groups led to a significant vote-share shift towards PDP in the recent elections. After the elections, we will keep an eye on how Buhari balances the oil crisis and the southern conflict.
While taking strict action to curb insurgency and corruption, Buhari may be continuously alleged for usurping both judicial and legislative power. His past record of using military rather than diplomatic or democratic steps have been put under question but also suppressed by power. This is not a very good sign for the future of the Republic of Nigeria, however, with the entire world tending to shift towards a more strong and decisive right-aligned governments, Buhari seems to be the best choice available and his steps in the next 4 years will decide what will be seen and experienced by the Nigerian generations that follow.
At FAZRemit, we hope that “Unity and Faith, Peace and Progress” prosper in the Giant of Africa.
Since the foundation of society and leadership, policies framed by the representatives has affected the lives of inhabitants. The difference that a good and stable government can have on the…
Since the foundation of society and leadership, policies framed by the representatives has affected the lives of inhabitants. The difference that a good and stable government can have on the present and future of a country is undebatable. And one of the decisive event(s) would be the upcoming Nigerian general elections scheduled on February 23, 2019, after getting postponed from February 16, 2019, by the Nigerian electoral body just a few hours before the polling time. This was seen by a majority of Nigerians as a huge blunder of an incumbent government that impacted the country’s international reputation.
What is Going on for the Nigerian Economy?
Nigerian economy has always been under the spotlight because of it being the biggest economy, having the largest population and topmost destination for online remittances among all other sub-Saharan African nations. As compared to the previous year, the latest report by PricewaterhouseCoopers (PwC), named as Nigeria Economic Outlook: Top 10 themes for 2019, states that Nigeria observed an overall remittance inflow of $25 billion in 2018 as compared to $22 billion in the previous year.
Remittances, Agriculture and Oil
The total remittance amount makes a major proportion of Nigerian economy contributing to approximately 6.1% of the GDP, however, with an economy that grew at a steady pace of 1.9% in 2018 as compared to 0.8% in 2017, the country is too far when it comes to the list of fastest growing economies in the world and for such a nation, migrants sending money to Nigeria in 2018 have surpassed the total foreign aid received in 2017 by 7 times.
This is a clear indication of the importance of remittances for developing nations like Nigeria that government needs to encourage more but at the same time, the above statistics also suggest that the agriculture sector (that makes over one-third of the total employment, ranks 6th in the world and 1st in African subcontinent) is facing the problem of overconsumption due to overpopulation and the high-agriculture producing country has been forced to import food to feed its own population.
Adding to the problems of the oil-driven economy is the fluctuation in oil prices in the international market along with a highly anticipated political uncertainty because of the 2019 Nigerian general elections that could affect the investors’ interests.
Slowdown of Investment?
Consequently, this could fuel the already unstable Nigerian macroeconomics. Although Nigeria has been a centre of attraction for global investors because of the potential of its booming consumer base, with the elections around the corner, the uncertainty of drastic policy changes post-elections seems to repel the capitalists from making more investment, thereby making a significant dent on the inflow.
It could further shoot up the Fiscal deficit that has already reached 3% of total Nigerian GDP after a 79% increase from the previous year. With 45% debt service to revenue mark as opposed to the government-estimated 31% and constantly increasing fiscal deficit, it is most likely that the Nigerian government would be turning towards issuing more domestic bonds.
Nigerian General Elections – Not for the Youth?
So, all in all, things don’t look very good for a country that has half of the population under 30 years of age and is suffering from a yearly population growth of 2.6% resulting in an exponentially increasing number of unemployed youth which is at an alarming 23.1% as compared to 18.1% in 2017.
Considering all these numbers, even after the #NotTooYoungToRun campaign, the Nigerian community can be said to be dominated by the older generation as although the youngest candidate in the general elections, Chike Ukaegbu, is running on an education platform, he is 35 years old.
All of the aforementioned points makes it imperative for the Nigerian government to check on a few steps that are bound to have a drastic effect on the overall Nigerian economy if not considered beforehand. It is most likely that election spending along with petrol prices and power tariffs would, at a great extent, cause inflation to worsen for which the Nigerian government does not seem to be very well-prepared. Also, the ones for whom leadership needs to take noteworthy steps are themselves not participating, or are not being made part of the change which is yet another concern as an inability to provide basic amenities like quality education, food, shelter and medicine is inducing the feeling of rebellion among the youth, especially the millennials who show a promising future if things go right.
Also, election time could also lead to political tension leading to a less-powerful but more actively operating notorious Boko Haram in the North and rebels in the south targeting the heart of Nigeria oil industry – Niger Delta.
The rebels were paid monthly allowances during Buhari’s regime, however, the uncertainty due to elections can flare up the tensions again. Consequently, this would have direct or indirect implication(s) on the economy and well-being of the natives and the state as a whole.
So, it can be concluded that the results and consequences are uncertain but without any doubt, the stakes are extremely high as the upcoming Nigerina general elections will play a decisive role in driving the future of Nigerian economy!
The millennials have the responsibility to correct the mistakes of the past to lay a strong foundation for the upcoming generations and it all starts with education!
Nigerian diaspora is the most successful ethnic community in the United States of America.
The Nigerian government needs to make policies that encourage formal remittance services that wire money to Nigeria.
The educated young Nigerian immigrants have the responsibility and show a promising ability to drive the wheel of global socio-economic welfare.
Remitters need to understand all the options before availing any online money transfer service offered by banks or IMTOs.
“Migrants are bringing down the economy. They are a threat to the United States. They undermine the All-American lifestyle. Migrants are – very bad!”
You must have heard similar language or context if not exactly the same sentences used for migrants even by “some of the most powerful people in position of authority” but the question arises –
Is it true?
What are the immigrants doing in a different country?
What is their own country doing to stop the migration?
How are the millenials contributing to the development of their native country?
To get answers to all the questions one by one, it is strongly recommended that you continue to read this blog. Putting it in the most simple terms, the hypothetical threat imagined from even legal migrants by the general population is a clear indication of lack of knowledge of the perceivers. The ones who claim migration as evil, first of all, need to understand that the most powerful nation, United States, as we know it today, is a land of immigrants. In fact, there is no ‘American culture’ so to speak. The amalgamation of cultures, rituals, celebrations, ideas, opinions, dissent, and the diversity has led the country to acquire its current status and for that, a huge amount of credit goes to the 13.5% population consisting of migrants from across the world. Among them, one of the most successful ethnic group is the Nigerian diaspora – the young community which, as per the World Population Review, has a median national age of just 18.4 years. Apart from providing a highly educated workforce to the migrated country, the Nigerian diaspora currently contributes US$22 billion to their own nation’s GDP by wiring money to Nigeria.
Value of Remittance in Nigerian Economy
To understand the importance of remittance, we can take a look at the inflow of remittance in Nigeria that has a 9% share in the overall global International remittance market and more than 6% of its own Gross Domestic Product relies on it. Moreover, the total money transfer to Nigeria from all over the world is estimated to cross $42 billion by 2022. Further, this sub-Saharan country has a 75% share in the total remittance inflows within the African sub-continent.
The Federal Republic of Nigeria, being a steadily developing country in West Africa, spends almost $1.15 billion annually to overcome poverty through public programmes. In 2006, Nigeria became the first African nation to repay its debts (which is estimated to be $30 billion) owed to the Paris Club in which the international money wire transfer contributed a significant amount as the total transactions went over the roof from $1.063 billion in 2003 to $16.932 billion in 2006.
So, in this article, we will discuss how the remittance market has become a major source of income for the Nigerian population and how it is acting as a gateway for high-end investors. We will shed some light on the steps that the government must take for the upliftment of this sector and the challenges they are likely going to face along the way. Further, we will understand the role that the Nigerian youth has to play and how they can take the first and the most important step in this direction.
Underperforming Nigerian Government
Nigeria has 82 million hectares of arable land out of the 91 million total land area with 30% of its population involved in the agriculture sector. However, lack of tools and infrastructure has led to a highly underperforming agriculture sector, because of which the Ministry of Agriculture and Rural Development claims to spend more than US$23 billion on food imports to feed its 186 million population.
Furthermore, in 2005, Nigeria had the highest deforestation rate in the entire world. Because of the lack of resources and the exploding population, young Nigerians are moving out of the country seeking better opportunities. Because of this trend, famously known as Brain drain, Nigeria has also become one of the developing nations witnessing a high deficit of experts in medical, engineering, academics and other professional sectors. But that being said, the multinational state comprising 250 ethnic groups with the third-largest youth population after India and China, undoubtedly has an immense potential to spearhead the next agricultural revolution.
Although the country is struggling to keep a hold of their talent and minds, the same migrants are contributing in a different manner. In 2007, the International Organization for Migration announced a fresh data pointing to the dramatic increase in Nigerian remittance inflow from $2.3 billion to a whopping $17.9 billion within just a short span of 3 years. But these numbers do not give a detailed account of the problems that this trend entails which includes the channels being used for sending money internationally.
Why Nigerian Formal Remittance has been on the Back Foot?
Since the last 50 years, as stated in the World Bank’s Excerpts for International Conference on Migrant Remittance, Nigerians have been relying heavily on the money sent by migrants residing in developed countries such as the United States of America and the United Kingdom. Because of the distrust in the Nigerian formal financial institutions that have been unsuccessful in providing the general population with minimal requirements such as competent transportation and communication facilities, both the Nigerian senders as well as receivers prefer the informal international transactions which currently dominate the US-Nigeria and UK-Nigeria remittance corridors.
So what should be done about that? – Improve public policies especially targeting the millennials’ needs.
Education – The Fundamental Change
After becoming a republic in 1960, lack of stable policies because of 30 years of intermittent governance and military rule crippled multiple sectors of Nigeria including education, health, and economy.
Without a unified set of education policies for the booming population, as per the UNICEF’s Nigerian Education Statistics, 45% of Nigeria’s 171 million population is under 15 years of age. With a concerningly gigantic number – 10.5 million – Nigeria has the world’s largest out-of-school youth population. Only 20.1% education accessibility because of lack of government funding along with social factors like early marriages and low perception of the value of education among the general population has resulted in, as education activist Malala Yousafzai puts it,
“An education state of emergency in Nigeria”
Economic prosperity can only be achieved through proper education and administrative support. Nigeria is in a dire need of government-funded education for which the Ministry of education needs to implement an inclusive and functional education system. With the 3rd largest youth population in the world, the country is not short of any potential but the question arises – how can Nigeria plan for their future while it is heavily dependent on Oil trade that does not seem to have a very bright future.
The Future of Nigerian Oil and Gas Export
Nigeria relies on oil and gas trade as 83% of its export revenue, two-thirds of the public revenue, and 9.4% of its GDP depends on it. Although the myth – “oil is reaching total depletion” – has been critically refuted by several environment scholars but the research and development in ‘clean and renewable energy sources‘ have been showing promising results with a welcoming global response which could affect the oil trade. This implies that it is high time for the Nigerian government to prepare for an oil-less future even if not because of the lack of gas then because of the undergoing paradigm shift which was noticed in the third quarter of 2018 with a 4% contraction of oil sector as compared to the previous year.
Meanwhile, it may seem from the outside that the Nigerian economy is highly dependent on oil exports, which it currently is, however, it would be wrong to underestimate the diversity of a country that, as per McKinsey Global Institute’s ‘study of the country’ report, can become the 26th largest global economy within the next 12 years. The steady improvement of 1.5% in the non-oil sector in the second quarter of 2018 followed by 2.3% in the third quarter indicates remarkable efforts by the Nigerian government to achieve economic and fiscal stability by constructively using their abundant resources and a strategic geographic location.
The constantly growing consumer class paired with an energetic youth fueled by a high entrepreneurial spirit are also attracting investments from across the globe. The developing trend in Nigeria is being viewed as an emerging business opportunity for the investors who are envisioning to tap the largest African economy estimated to provide a $1.4 trillion market by 2030 for food and non-food consumer goods. Even in this sector, however, the government needs to facilitate the ease of doing business.
How can they do that? – By NOT de-regulating MTOs and other businesses.
Instead of hindering the success of the emerging industries, if the Nigerian government provides adequate support for the taxpayers and public beneficiaries, and formulates modern trade policies, it can pave the way and could significantly accelerate the process of leading multinational corporations contributing to the Nigerian economy and social welfare. Apart from foreign endeavors, a long-term and stable federal budget allocation for education, healthcare, infrastructure, and security can also check brain-drain. Moreover, positive steps could also be a boon for Nigeria reversing the brain drain to return-migration, thereby brain-gain.
Now that we know the extent of the impact that good governance can have, especially for the Migrant nation, let us take a look at some of the numbers showing how despite facing multiple challenges, the Nigerians have made their mark in the world.
Contributing More than the Natives
Immigration has always been a debatable topic but for a nation’s economy, especially when we consider the United States of America, migration has brought a fortune. Simulations by ProPublica show how immigrants can further escalate the American economy by supplementing approximately US$54.5 trillion.
You be the Judge…
Further, let us have a look at some of the statistics about the performance of Nigerian migrants who are doing pretty well in the United States,
The average household income of a Nigerian-American is $62,351 as compared to the overall average of $57,617.
37% of all the Nigerian-Americans hold a bachelor’s degree and 17% have master’s.
With just 1% of the total black population in the US, 25% of Black Harvard students are Nigerian natives.
Other than holding reputable positions in medicine, law, and engineering professions, non-conventional career choices including NFL and Hollywood have also welcomed and embraced Nigerian-Americans.
This trend is similar in European nations such as the United Kingdom, Italy, Spain, Germany, Ireland and all other destinations across the globe where 33% of the total Nigerian migrants move to and send remittances from. Consequently, overcoming discrimination and racism, the Nigerian diaspora has excelled and contributed to both the migrated country as well as Nigeria, directly or indirectly. In line with that, the eventual beneficiaries, i.e. the general population, especially the youngsters, are responsible for the development of the country and as mentioned earlier, education has been and will continue playing a pivotal role in uplifting Nigerian socio-economics while repaying what they owe to the migrated country better than their own natives.
Being part of an unstable and war-stricken nation, Nigerians and especially the millennial generation has come a long way as compared to other nations like Syria, Iraq, and Afghanistan. Also, migrants, in general, are able to sustain themselves on their own, however, for some people living in their home country (Nigeria, Mexico, India, China et cetera), remittance could be the only source to survive and/or to overcome personal problems, financial setbacks, political instability, terrorist attacks or even natural disasters.
Although currently there is no authentic data classifying the remit senders on the basis of age, education profile or financial status, the purpose itself makes a compelling case why all the migrants who send money to Nigeria should understand how they can take the full benefit of international online money transfer services.
How to Select the ‘Best Money Transfer Nigeria’ Service?
Online research and analysis of the remittance market by FAZRemit provided a list of the top 5 search queries used by the customers on different search platforms so as to wire money online, namely,
Money transfer to Nigeria
Wire money Nigeria
Send money to Nigeria online
How to send money to Nigeria
How to wire money online
To address all the aforementioned search queries, let us discuss how one can select the best money transfer service to send remittances to Nigeria. The US$689 billion worth global remittance market has been prompting IMTOs from across the globe to dive into this huge financial pool that carries unparalleled opportunities for small to large scale businesses. To increase their clientele comprising of individual remittance senders and even MNCs conducting online money transfers, banks and IMTOs have been constantly upgrading their services to provide a wide range of international money transfer services. With so many choices, the customers thus have the advantage to select the best option on the basis of 4 major factors:
1. Is it affordable?
This is the reason why most of the remittance senders are turning towards IMTOs instead of banks as the average transaction fee levied by banks to send money to Nigeria from the United States has always been much higher. As per the last survey conducted by the World Bank in June 2017, international money wiring via banks is currently 1.47% higher than the global average whereas most of the IMTOs charge 3.06% lesser than the banks.
The cheapest wire transfer includes the international Automated Clearing House (ACH) payments, also known as a direct debit or electronic transfer, in which the transaction fee is the lowest, and the service provider, most of the time, provides additional discounts to the recurring customers. At the same time, however, there have been instances where operators charge an additional fee without giving any further notice to the customers which could result in overdrawing money from your account making this a huge downside of the ACH payment.
2. How fast is the money transfer?
While ACH is the cheapest, it can take anywhere from a few hours to seven business days to complete the transaction. Overcoming this problem is wire transfer which is the fastest in the ‘international money transfer’ section.
Although this digital money transfer is more expensive, one may find it comparatively much more difficult to deal with the bank for this service because of the stringent documentation and tedious verification. Moreover, some overseas banks and credit unions could also charge an additional fee to receive such transactions. This is where IMTOs can help one to avoid such problems.
In case of emergency, when one requires his or her money to be transferred instantly, just like wire transfer, there are several other options available for everyone. All one needs to do is – look at the right place.
3. Is it a safe money transfer?
Wire transfer is fast but possibly the only disadvantage with this type of transaction is the inability to reverse it. Even if some agencies including banks and IMTOs could provide such a facility but this could result in you paying a hefty fee for the same. Meanwhile, it is crucial for a customer to conduct a background check of service providers before availing their service. Due to strict AML laws, the Nigerian government has licensed only certain IMTOs. So, even if you are getting alluring discounts, you must either choose the certified institutions or their subsidiaries. It is important to notice the documentation and verification that is being done by the service provider. In case the MTO does not ask for mandatory documents or gives you an offer that seems ‘too good to be true’, it becomes even more important that you get your query resolved.
This is one of the main reasons why individuals prefer banks for large money transfers. However, even if you are using a certified Money Transfer Operator, you are more likely to get similar reliability if not better but without any doubt, considering the lack of investment in infrastructure and outdated mechanism in the public sectors in Nigeria, you can be guaranteed a better service right from the first point of contact to the final transaction and even beyond.
4. Are there any hidden charges?
To put it in a simple manner, no business can be conducted without any benefit. So, if you see any free international money transfer option, you must know that the concerned operator, in advance, has combined the exchange rate and transaction fee in the total charges. So, it is important for the customer to search and then verify the service provider claiming to provide you with the most affordable service. In simple terms – Save yourself from the ‘hidden fee’ trap.
Referring to all the aforementioned factors before actually transferring money can assist anyone to make a safe, secure and fast international money transfer at the most affordable price.
The baton of ‘economic change’ has already been handed over to the next generation – the millennials – and it is their responsibility to make analytically sound decisions by gaining impartial knowledge while minimizing the risks and avoiding the mistakes committed by the previous generations in order to avail the full benefits of each and every opportunity. And this is how millennials can revolutionise the future by actively taking part in one of the most beneficial trades that has a promising future for the Republic of Nigeria.