Page 9 - CITN 2017 Journal

1. INTRODUCTION

The phenomenal growth in migrant remittances has, in the last two to three decades,
attracted the attention of researchers, policy makers, development and donor agencies. As
a growing source of development financing, global migrant remittances, according to
World Bank (2007), have increased from about US$30 billion annually in the early 1990s
to an estimated US$318 billion in 2007 with an estimated 75 per cent of this amount
directed towards low-income developing countries. It added that recorded remittances
constitute nearly two thirds of foreign direct investment (FDI) flows and more than double
official aid flows to developing countries.
According to the International Monetary Fund (IMF), remittance flows worldwide
reached $550 billion in 2013 and over $700 billion by 2016. Expectedly, remittances from
Nigerians in Diaspora have continued to increase and indeed, have become a major source
of development financing for the country. According to World Bank (2013), the nation, in
2012 received US$26.82b from remittances compared to the average of US$11.1m in
1980s, US$802.1m in 1990s and US$11.41b in 2000s. In 2010 for instance, Nigeria was
th
the 10 in global ranking and Sub-Saharan Africa's highest recipient of remittances of over
US$10billion, accounting for about 50 percent of total inflows of remittances to the sub-
region.

According to Migration and Development Brief (MDB) issued by the World Bank in April
2013, Nigeria is by far the largest recipient of remittance inflows in SSA, accounting for
about 67 percent of the inflows to the region in 2012. Remittances also play an important
role in Nigeria's economy, equivalent to over 9 percent of GDP. About 50 percent of
remittance flows to the country in 2011 originated from the US and the UK, with about 40
percent coming from Chad, Italy, Cameroon, Spain, Germany, Ireland and Benin. In spite
of the feeble labour market recovery in several of its major remittance source-countries
like the USA and the UK, the MDB noted that remittance flows to Nigeria and the rest of
SSA are expected to grow significantly in the coming years to reach about $39 billion in
2015, led by positive prospects for Nigeria, Kenya, and other top recipient countries of the
region. In effect, migrant remittances have become a prominent source of external finance
in the Nigeria's economy. The World Bank estimates for Nigeria alone for year 2013 was
US$20.6b to underscore its importance in development financing.

Since these inflows are largely in small size and permeate a significant number of
households in the recipient economies, they undoubtedly have effects at the macro level,
influencing market prices and the interactions among households, firms, financial
intermediaries, and the government. Without doubts, therefore, remittances directly
augment the income of recipient households. In addition to providing financial resources
for poor households, they affect poverty and welfare through indirect multiplier effects and
also macroeconomic effects. This explains why Migration and Remittance featured in on
various discussions on the Millennium Development Goals and the on-going Post-2015
Agenda.

Remittances, like any other source of additional income, potentially give migrants,
households and communities greater freedom to determine and make their private
expenditure decisions (including investment and consumption decisions) and to allocate
their resources to those economic sectors and places that they perceive as most stable and
profitable. Can the cumulative expenditure of households, in this manner, positively
impact the development process of the Nigerian economy? Given the political, economic
and social circumstances of the country, can migrant remittances be considered as a major
driver of economic development in Nigeria? Since migration and remittances are

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