Eking Fair Share of $900bn Global Diaspora Remittances

In this piece, James Emejo writes that the Central Bank of Nigeria’s new diaspora remittance initiative could positively reset the economy and promote inclusive growth and development, among others

With a solemn declaration that “We must do everything to get our own share of global diaspora remittances,” the CBN Governor, Mr. Olayemi Cardoso has effectively committed the bank to one of its most audacious policy paths that could significantly cure the economy of the persistent challenge of Foreign Exchange (FX) inflows.

 are money or goods that migrants send back to families and friends in origin countries and are often the most direct and well-known link between migration and development.

According to the World Bank, remittance flows increased by 4.6 per cent to $905 billion in 2024, from $865 billion in 2023.

Also, $656 billion was distributed to low- and middle-income countries while 6.4 per cent was the global average cost of sending $200 in the fourth quarter (Q4) 2023, which more than doubled the Sustainable Development Goal (SDG) 10.

According to the Bretton Woods institution, remittances continued to be greater than Foreign Direct Investment (FDI), having increased by 57 per cent in the last decade in contrast to a 41 per cent reduction in FDI.

Nigeria’s Meagre Share

However, despite having a significant number of its citizens abroad, Nigeria’s share of the global diaspora remittances over the years remained low at about $20 billion, most of which are distributed through informal channels – promoting the latest  CBN’s efforts.

NRBVN as Game-changer

Driven by the need to have a fair share of the global diaspora remittance portfolio, Cardoso, in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS) formally launched the Non-Resident Bank Verification Number (NRBVN) platform recently.  The innovative digital gateway, which is projected to actualise the CBN’s $1 billion monthly diaspora remittances target – about $12 billion annually, allowing Nigerians in the diaspora to obtain a BVN remotely without the need for a physical presence in the country.

The initiative could also have diaspora remittances quadruple in the coming years.

Speaking at the launch attended by stakeholders in the financial ecosystem, including chief executives of commercial banks in Abuja, the CBN governor hailed the initiative as a milestone in the country’s financial inclusion journey and a critical bridge connecting the country to its global citizens.

He said, “By providing investment accounts, diasporans will have access to a variety of growing investment opportunities in our debt and equities markets, as well as products such as mortgages, insurance, and pensions. Importantly, diasporans will also have the flexibility to fully repatriate the proceeds of their investments in accordance with existing regulations, ensuring confidence and convenience in managing their assets.

“We strongly encourage Nigerian banks to proactively develop and offer products specifically tailored to meet the unique needs and preferences of our diaspora community.

“Offering innovative and attractive financial solutions can greatly enhance diaspora participation, deepen financial inclusion, and significantly boost remittance inflows.”

The initiative ensures that no matter where they live, Nigerians abroad stay connected, empowered, and confident in contributing to the country’s future.

The central bank governor also hinted that the initiative could reduce the high cost of remittances in Sub-Saharan Africa and ensure continued engagement with stakeholders to optimise the platform.

He said the CBN remained committed to reducing the cost of remittances, currently averaging over seven per cent in Sub-Saharan Africa, adding that lowering these costs will enhance the safety and appeal of formal channels while amplifying the socioeconomic impact of diaspora remittances on Nigerian households and the broader economy.

The NRBVN is part of a broader framework that includes the Non-Resident Ordinary Account (NROA) and Non-Resident Nigerian Investment Account (NRNIA) – enabling access to savings, mortgages, insurance, pensions, and investment opportunities in Nigeria’s capital markets.

Under current regulations, Nigerians in the diaspora will retain the flexibility to repatriate the proceeds of their investments.

Essentially, the NRBVN system has been built with global standards in mind, incorporating stringent Anti-Money Laundering (AML) and KYC compliance protocols to ensure the integrity, transparency, and security of Nigeria’s financial system.

Every NRBVN enrollment undergoes comprehensive verification checks to safeguard against illicit financial activity, bolstering international confidence in the platform and the broader financial ecosystem.

Cardoso said, “For too long, many Nigerians abroad have faced difficulties accessing financial services at home due to physical verification requirements.

“The NRBVN changes that. Through secure digital verification and robust Know Your Customer (KYC) processes, Nigerians worldwide should now be able to access financial services more easily and affordably.”

He said, though not the final destination, the NRBVN represented the “beginning of a broader journey.”

Remittance flows through formal channels increased from $3.3 billion in 2023 to $4.73 billion in 2024 due to recent reforms and policy shifts, including the introduction of the willing buyer, willing seller FX regime.

With the NRBVN in place, the CBN is optimistic about reaching its monthly remittance target.

Cardoso said, “We are building a secure, efficient, and inclusive financial ecosystem for Nigerians globally. This platform is not just about financial access. It’s about national inclusion, innovation, and shared prosperity.

“With the introduction of NRBVN and complementary policy measures, we are optimistic about achieving our ambitious target of $1 billion in monthly remittance flows, a goal we believe is entirely achievable given the growing trust and convenience in formal remittance channels.

“To meet these targets, collaboration and compliance with established regulatory frameworks remain essential. All stakeholders must adhere strictly to the FX Code and other relevant regulatory guidelines.”

He said, “This is critical to ensuring market stability, integrity, and overall confidence in Nigeria’s financial system. “We also invite IMTOs to integrate with the NRBVN platform as part of our shared vision to build a secure, efficient, and inclusive financial ecosystem for Nigerians globally.”

“A fully connected system will ensure that every Nigerian in the diaspora can confidently contribute to national development through trusted and cost-effective channels.”

Vital Source of External Financing

Augusto & Co, in its 2024 Diaspora Remittance Industry Report, maintained that diaspora remittances – funds transferred by Nigerians residing abroad, played a crucial role in the Nigerian economy, supporting households, enhancing welfare, and stimulating local investments.

The report noted that remittances continued to be a vital source of external financing for many low and middle-income countries (LMICs), including Nigeria, contributing to economic stability and development.

The Pan-African credit rating agency further stated that, notwithstanding global economic challenges, remittance flows to LMICs have demonstrated resilience, driven by strong ties between diaspora communities and their home countries.

It however, noted that in 2023, global remittance flows are projected to experience modest growth due to inflationary pressures and rising living costs in major remittance-sending regions, such as the United States, the United Kingdom, and the Eurozone.

Augusto & Co pointed out that the harsh economic climate, coupled with job losses in key markets, had impacted the disposable income of many migrants, influencing their remittance patterns.

Collaboration, Compliance Key for Success

According to Cardoso, with the growing trust and convenience in formal remittance channels, the NRBVN and complementary policy measures by the central bank, achieving the bank’s ambitious target of $1 billion in monthly remittance flows remained entirely achievable.

However, to meet these targets, he stressed that collaboration and compliance with established regulatory frameworks was critical.

He said, “All stakeholders must adhere strictly to the FX code and other relevant regulatory guidelines. This is critical to ensuring market stability, integrity, and overall confidence in Nigeria’s financial system.

“We also invite IMTOs to integrate with the NRBVN platform as part of our shared vision to build a secure, efficient, and inclusive financial ecosystem for Nigerians globally.

“A fully connected system will ensure that every Nigerian in the diaspora can confidently contribute to national development through trusted and cost-effective channels.”

According to him, the unveiling of  NRBVN was not the “final destination, but the beginning of a broader journey.

“The NRBVN is a dynamic initiative, one that will continue to evolve in response to the needs of its users. It presents a unique opportunity to learn, to innovate, and to adapt.”

It is noteworthy that the banking industry has already embraced the initiative and given their commitment to its implementation especially because of its win-win proposition. Banks are expected to boost their earnings sources through the diaspora inflows.

Group Managing Director/Chief Executive, Zenith Bank Plc, Adaora Umeoji and Manging Director/Chief Executive, 

Access Bank Plc, Roosevelt Ogbonna, have all commended the  NRBVN, while a representative of Keystone Bank to the gathering that one transaction had pulled through under the new diaspora policy

Surmounting Barriers of Distance and Payment Complexit

According to Cardoso, historically, Nigerians in the diaspora have faced significant hurdles when seeking access to financial services in Nigeria.

He pointed out that the mandatory physical verification required for obtaining a BVN often incurred considerable costs in terms of time and financial resources, especially for individuals residing in remote locations.

He said, “The NRBVN platform addresses these very concerns. Through digital verification and robust Know Your Customer (KYC) processes, Nigerians across the globe can now remotely obtain their BVN swiftly and securely.

“ This single digital gateway will enable seamless access to banking services, including opening accounts and securely sending funds, dramatically enhancing convenience and reducing costs.

“In developing this solution, we draw valuable lessons from countries such as India and Pakistan. India’s Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts have significantly simplified banking processes for its diaspora, and Indian banks currently hold approximately $160 billion in diaspora deposits, achieved by providing attractive and tailored products and services. Similarly, Pakistan’s innovative Roshan Digital Account, offering fully online onboarding and investment opportunities, has successfully attracted nearly $10 billion since its inception.

“These examples underscore the power of digital financial inclusion and specifically tailored products in driving meaningful engagement and substantial economic inflows from diaspora populations.” According to him, the NRBVN platform is similarly designed to offer “more than access, it is about opportunity. “

Also, in his remarks at the launch, CBN Deputy Governor, Economic Policy Directorate, Mr. Muhammad Sani Abdullahi,  described the NRBVN as a significant stride forward for the apex bank as it strives to create a more inclusive financial ecosystem, “ensuring that every Nigerian, regardless of where they reside across the globe, can actively participate in and contribute to our nation’s economic landscape”.

He said, “Today, we are breaking down barriers of distance and complexity, paving the way for a more connected and empowered diaspora.

“The NRBVN stands as a transformative tool, meticulously designed to enhance the banking experience for our diaspora community. By providing secure, remote access to financial services, this platform simplifies the process of maintaining robust banking relationships, facilitating meaningful investments in Nigeria, and supporting the seamless flow of remittances.

“It is our firm belief that this initiative will not only strengthen economic ties but also foster a sense of pride and belonging among Nigerians worldwide, encouraging them to play an even greater role in our nation’s development.”