Economic experts in Nigeria have called on the Central Bank of Nigeria (CBN) to redirect diaspora remittances into productive and revenue-generating sectors. This appeal comes as the CBN's regulatory reforms have successfully facilitated $11.12 billion in personal transfers into the country in the first half of 2026. The experts commend the CBN's efforts in formalizing diaspora remittances, which have pushed monthly formal inflows to a record high of $947 million.
The CBN's strategic focus on formalizing diaspora remittances has brought Nigeria close to achieving its $1 billion monthly remittance target. According to economic and financial expert Olaoluwa Adegboye, foreign remittances represent vital cross-border capital inflows from diaspora populations to their home countries. However, Adegboye notes that in Nigeria, a significant portion of diaspora inflows is channeled into immediate consumption rather than wealth creation.
Adegboye explains that capital is largely absorbed by recurring household welfare expenses, medical bills, school fees, and social ceremonies. While this provides a critical socio-economic safety net and buffers households against poverty, it yields minimal long-term multiplier effects for the broader macro-economy. He adds that a substantial share of diaspora investment is directed into residential real estate that frequently remains unoccupied or serves solely as vacation homes.
Analysts believe that the CBN's harmonization of official and parallel market rates eliminated the primary incentive for using risky black-market operators. The CBN, under Governor Olayemi Cardoso, has licensed more International Money Transfer Operators (IMTOs) and streamlined processing rules to lower transaction friction. The introduction of simplified digital identity tools like the Non-Resident Bank Verification Number (BVN) alongside dual-currency banking products has made formal routing effortless for Nigerians abroad.
Another economic expert, Idris Ahmed, notes that the CBN's tightening of requirements so that all formal remittances must clear through designated settlement accounts with authorized dealer banks has significantly enhanced transparency. However, concerns over accountability, weak contract enforcement, and lack of trusted operational proxies deter Nigerians abroad from establishing formal small- and medium-sized enterprises (SMEs).
Ahmed suggests that policymakers must create institutional mechanisms such as diaspora investment funds, transparent public-private partnerships (PPPs), and structured mortgage-backed instruments that reduce trust deficits and redirect diaspora capital into productive, revenue-generating sectors. At the 307th Monetary Policy Committee (MPC) meeting, CBN Governor Olayemi Cardoso stated that engagements with diaspora communities are improving, with many showing genuine interest in listening to the CBN.
The CBN plans to engage with diaspora communities to educate them on the positive things that have been done. Experts believe that redirecting diaspora remittances into productive sectors can convert these flows from consumptive subsidies into sustainable economic drivers. The CBN's efforts to formalize diaspora remittances have shown significant progress, but experts argue that more needs to be done to harness the full potential of these inflows.
Key points
- Experts urge CBN to redirect diaspora inflows into productive sectors to support the economy.
- CBN's regulatory reforms have facilitated $11.12 billion in personal transfers into Nigeria in the first half of 2026.
- Monthly formal inflows have reached a record high of $947 million, close to the $1 billion monthly remittance target.
