Published on 24 Nov 2023

How the Money You Send Back Home Grows the Economy- A Case Study of Nigeria

Remittance

Nigeria

Economy

Diaspora

Introduction

It is not news that remittances play a vital role in the economic development of many countries, and Nigeria is no exception. Nigerians living abroad often send money back home to support their families and loved ones. But beyond the immediate benefit to individual households, these remittances contribute significantly to the overall growth of the Nigerian economy. According to the World Bank, between 2015 and 2022, Nigeria received a whopping $168.33 billion in remittances – making it the king of remittances in sub-Saharan Africa. Most of this money comes from Nigerians living in the UK, USA, Canada, and Europe. And guess what? This money party contributes up to 6% of Nigeria's GDP – and that's a big deal for our economy. So, what's the secret behind these remittances and their impact on the Nigerian economy? Let's break it down.

Boosting Households

Remittances sent by Nigerians living abroad serve as a lifeline for countless families back home. These funds cover the essentials – food, housing, healthcare, and education. All that spending juices up local businesses, like retail and services, and helps the economy grow.

Business Startups

Who doesn't love a good startup story? Lots of remittance money finds its way into small businesses and new ventures. People use it to kickstart their dreams or expand their existing businesses. It's like a boost for entrepreneurship, creating jobs and opening more opportunities.

Home Sweet Home

Remittances also play an important role in the real estate game. Families use the money to build or fix up their homes, creating a demand for construction infrastructure and services. So, boom! The construction industry grows, and jobs pop up like magic.

Improving Financial Inclusion

The more remittances come in, the more banks and payment services reach out to people. Digital platforms like Blaaiz make it easy for money to flow to and fro, creating the ease of transacting anytime, anywhere.

Less Poverty, More Equality

Remittances are a poverty alleviation tool, especially in rural areas with limited employment opportunities. By providing families with additional income, remittances help alleviate poverty and reduce income inequality. This leads to a more equitable distribution of resources and improved social welfare.

Edu-tainment and Healthcare

Education and healthcare also get a boost too! Remittances help families pay for school fees, books, and better healthcare. Noteworthily – a well-educated and healthy population is key to a prosperous country. So, to Nigerians in Diaspora, please keep those remittances flowing. You're doing more than just sending money home – you're fueling the country’s growth and making dreams come true. Remittance platforms like Blaaiz are on course to provide a quick, reliable and secure avenue to make sending and receiving these payments as convenient as possible.

Adekola Williams

Investment Banker

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