Nigeria’s remittances to hit $23bn in 2025 as diaspora,

By Chinwendu Obienyi

As Nigeria continues to navigate a volatile global environment marked by uneven capital flows, fragile oil receipts and tightening external financing conditions, a new report has emerged that remittance inflows, one of the country’s most reliable and countercyclical sources of foreign exchange (FX), could hit $23 billion by the end of the year.

If realised, the projected inflow would represent Nigeria’s highest level of remittance receipts in five years, reinforcing the role of diaspora flows in stabilising the country’s external position at a time when traditional FX sources remain under pressure.

Historically, remittances have consistently shored up Nigeria’s external buffers during periods of oil price volatility, weak capital importation and heightened global risk aversion.

According to the report, the projected increase highlights the enduring resilience of Nigeria’s global diaspora, even amid persistent global inflation, higher interest rates and broader macroeconomic pressures affecting advanced and emerging economies alike.

The report, titled “Remittance Inflows Reach $23 Billion,” was published by Makreo Research, a Mumbai-based global consulting and market intelligence firm. It notes that the expected surge in remittance flows will play a pivotal role in supporting Nigeria’s broader macroeconomic framework, particularly by strengthening external liquidity and complementing ongoing FX market reforms.

Makreo Research attributes the outlook to a combination of strong diaspora engagement, rising digital adoption in remittance channels, and improved policy clarity in Nigeria’s financial system. These factors, the report argues, are gradually redirecting remittance flows from informal pathways into official channels, improving transparency and the quality of FX inflows.

Commenting on the findings, Global strategy analyst at the Meghnad Desai Academy of Economics (MDAE), India, Omkar Manjrekar, said record remittance inflows reflect deeper structural shifts within Nigeria’s economy. “Record remittance inflows and rising digital adoption underscore Nigeria’s structural transformation, signaling improved transparency, policy clarity and a more resilient financial ecosystem,” Manjrekar said.

Nigeria remains the largest recipient of remittances in Sub-Saharan Africa, accounting for more than 35 per cent of total flows to the region, according to the World Bank. Between 2018 and 2023, annual remittance inflows averaged between $22 billion and $25 billion, surpassing foreign direct investment (FDI) and, in some years, rivaling oil earnings in net FX contribution.

The countercyclical nature of remittances has become increasingly evident over the past decade. During the COVID-19 pandemic in 2020, when capital importation declined by over 60 percent and oil receipts collapsed following a sharp drop in global crude prices, Nigeria still received $17.2 billion in remittances. These inflows played a critical role in helping gross external reserves close the year at $35.4 billion, despite severe macroeconomic headwinds.

A similar pattern emerged in 2022 and 2023, when global monetary tightening and risk-off sentiment weighed heavily on foreign portfolio investment (FPI) inflows, while domestic oil output remained constrained by operational and security challenges. During this period, remittance flows through the autonomous FX market provided a critical cushion to FX liquidity, easing pressure on the naira and indirectly supporting reserve levels.

Chief Executive Officer, Financial Derivatives Company Limited, Bismarck Rewane, said,” Remittances behave differently from other external inflows.

They are driven by personal and household obligations, not interest rate arbitrage. That makes them more stable and more resilient during periods of global stress.”

Also speaking, analysts say the projection aligns with Nigeria’s demographic reality, with a large and growing diaspora population whose remittance behaviour has remained remarkably stable even during periods of global economic uncertainty.

It is safe to say that the recent gains in remittance inflows have not occurred in isolation. They coincide with a series of policy reforms by the Central Bank of Nigeria (CBN) aimed at improving pricing, transparency and access within the remittance ecosystem.

In 2024, the CBN under the leadership of Olayemi Cardoso, implemented wide-ranging reforms to the International Money Transfer Operator (IMTO) framework to boost remittance inflows and redirect more diaspora funds through official channels. These measures included granting IMTOs access to naira liquidity at the official FX window, expanding payout options in both naira and foreign currency, onboarding new licensed operators, and enforcing stricter compliance standards to improve transparency and competition.

The impact has been notable. Formal remittance inflows rose by 44.5 per cent in 2024 to $4.76 billion, according to CBN data. By mid-2025, according to Cardoso, inflows had increased by about $600 million, compared with roughly $200 million over similar periods in previous years.

Speaking in September during the Monetary Policy Committee (MPC) meeting in Abuja, Cardoso, whilst engaging with newsmen on a wide range of pressing issues from Nigeria’s payment system vision and regulatory forbearance to inflation control, foreign reserves, and fiscal-monetary coordination, said, “We are coming from a very difficult position, but today our reserves are on an upward trajectory, reaching their highest levels since 2019.

This has been made possible by targeted measures that we introduced. For instance, when we launched the non-resident Naira-settled FX market (NRBVN), inflows initially averaged about $200 million per month. Within a relatively short period, we doubled that figure, and by the end of the year, we had exceeded our targets. Looking ahead, we are now targeting $1 billion in monthly inflows, and we are confident this is achievable”.

For many diaspora Nigerians, the absence of a BVN limited access to Nigerian bank accounts, IMTO services and domestic investment opportunities, often pushing remittance flows through informal channels.

Thus, it is expected that the platform would lift formal remittance inflows further beyond the $23 billion figure, even if total diaspora transfers grow at a moderate pace, as more funds are captured within the banking system.

Nigeria’s engagement with its diaspora is also extending beyond household transfers to structured financing instruments. The federal government’s $300 million diaspora bond issued in 2017 was oversubscribed, reflecting strong demand among Nigerians abroad for yield-enhanced Nigerian assets.

Although modest relative to total reserve levels, the issuance demonstrated the potential of diaspora financing as a complement to conventional external borrowing. This appetite resurfaced in 2024, when Nigeria issued a $500 million diaspora bond that again attracted robust subscription.

Not to forget, there has improved channel efficiency under the CBN’s “Naira 4 Dollar” incentive scheme which was designed to encourage diaspora remittances through official channels, has also helped boost FX supply to the Nigerian Foreign Exchange Market (NFEM), complementing oil receipts and portfolio inflows in rebuilding external reserves through late 2024 and early 2025.