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
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.