Nigerian migrants working overseas are sending billions of dollars back home to support their families, in a big boost for the local remittance market, a new study has revealed.
Nigeria international remittance market is expected to reach $42 billion by 2022 following the relaxation of local regulatory restrictions which are boosting money transfers across the border.
According to the report by Ken Research titled “Nigeria Remittance and Bill Payments Market Outlook by Inbound and Outbound International Remittance, By Mode of Transfer (Cash or Electronic Transfers), By Channel (Bank and Non-Bank) – Outlook to 2022”, By the year 2022, the transfer of funds through electronic means is expected to reach 89.0% followed by cash transfers that shall account for a share of 11%.
“International remittance in Nigeria is largely dominated by the remittance inflow from other counties. Inflow of remittance from other countries has contributed a share of 95% in the overall revenues of the industry in 2016.”
Based on market trends, Nigeria receives about 67.0% of the total remittance received in the Sub-Saharan Africa region.
The growth of the local remittance industry has been majorly driven by the large number of Nigerian diaspora who have migrated overseas in search of higher paying job opportunities, the report says.
The number of Nigerian migrants in 1990 was 465,932 and it has grown over the years. In 2013, the Nigerians living outside their country were 1,030,322 that are more than double the number in 1990.
International remittance in Nigeria is largely dominated by the remittance inflow from other counties. Inflow of remittance from other countries has contributed a share of 95% in the overall revenues of the industry in 2016.
The rising population of Nigerian migrants in the US and UK has surged the transaction volume of remittance from these countries to Nigeria. The US-Nigeria and the UK-Nigeria remittance corridor are equally dominated by the informal remittance channels. The remittance flows to Nigeria from these corridors is also underreported because the Nigerian government still lacks proper infrastructure and mechanism for data collection, the report says.
The study projects that the relaxation of regulations for outflow of remittance from Nigeria to other countries will present a great opportunity for the MTOs. The international outbound remittance is likely to grow robustly in the coming years. Also, the use of Bitcoins to remit money in Nigeria is also very likely to gain popularity in the near future.
The rising number of households and growing infrastructural development in the country will drive the market of Nigeria bill payment industry. It has been forecasted that the market will reach $146 billion by 2019
In Nigeria, international remittance is a critical source of income for the people and has changed their standard of living to a great extent. Remittance inflow from other countries into Nigeria has resulted in development of the country in many ways. Each year, Nigerian migrants working overseas send billions of dollars back home to support their families. Maximum number of Nigerian migrates to developed countries such as the US, the UK, Spain, Italy and other European and African countries. In terms of transaction volume also, maximum remittance is received from the US and the UK followed by other European countries.
The major players in the Nigeria international remittance market include banks and non-bank institutions that include MTOs and transfer through family and friends. Some of the major banks in the market include Guaranty Trust Bank, Eco Bank, Fidelity Bank and others. In terms of MTOs, the industry till now was concentrated with only a few major companies such as Western Union, MoneyGram, World Remit and RIA dominating the industry, according to Ken Research.