Sulaimon Olanrewaju looks at the effects of the decline of remittances from Nigerians living abroad on the beneficiaries and the economy.WITH the report, Pa Ahmed Mustapha is in pains. No, he is not ill; he is neither down with cancer nor diabetes. His pain is a consequence of his frustration. A retired civil servant, he was not able to achieve much while he was in service being a junior officer, but not long after he retired about eight years ago on attaining the mandatory retirement age of 60 years, his youngest son was able to travel to Europe and since then had been sending money regularly to his parents for their upkeep.About three years ago, he asked his father to get a plot of land on which a duplex is being constructed. However, since the beginning of this year, the younger Mustapha has been unable to remit money to his family as he used to do because he lost his job and is currently on subsistent existence. According to him, now he does odd jobs, the remuneration of which is barely able to pay his bills. Consequently, he has not been able to remit money to his parents as he would have wanted to. Although work has advanced greatly on the building project, having been roofed and plastered, it is still not habitable. This is the cause of Pa Mustapha's pains. He had planned to exit the rented apartment which he had habited for about 30 years for the new house by the end of 2011 but with the way things have turned out now, that is not immediately feasible as no new thing had been added to the building since the beginning of the year. He is so close to his desire but the realisation seems light years away from him.Another of his concern is that now he has to keep listening to the news to know when to join other pensioners to queue for their stipend, something he had not had to bother about while his son was holding down a good job abroad because of the regular remittances from the son. But now the tide has changed, to survive, Pa Mustapha, who is nudging 70 years, has to worry about the most basic things of life.Pa Mustapha's story is replicated in many families across Nigerians. A number of people have come to depend on relations in Europe and North American countries for their existence. Every month, they await a telephone call from their relations abroad to get a control number with which they go to a bank to get some foreign currencies which their relations have wired to them. This has sustained many families. This gesture from across the Atlantic Ocean has ensured that those who were seriously ill and needed surgery or other complicated medical services were able to pay for the services. This act is the only reason some people were able to complete their education. But now, even that oasis is drying up.Apart from helping individual families, the fund from Nigerians in the Diaspora has also contributed greatly to the macroeconomics of the nation at large. Some Nigerians living abroad have set up small scale businesses for their relations in Nigeria. Some have also invested greatly in properties, thus contributing to alleviating the nation's housing problem. Some have invested in transportation and education as well as other sectors of the economy. But in the last one year or so, the contribution of this category of Nigerians living abroad has slowed down.Throwing light on this development recently, the Director General, Budget Office of the Federation, Dr Bright Okogu, said the harsh economic condition prevalent in Europe and the United States of America had affected the income earning ability of Nigerians living in those countries with some of them losing their jobs, adding that this would affect their remittances to the country.According to him, remittances from Nigerians in the Diaspora had reduced from $12 billion to about $5 billion in the current year.Okogu, who was speaking penultimate Thursday in Abuja at the third economic policy and fiscal strategy seminar organised by the Centre for the Study of Economies of Africa (CSEA), said the sovereign debt crisis and the declining Gross Domestic Product in Europe, low manufacturing output in France, Germany, Italy and Spain and growing US debt to the Gross Domestic Product ratio had led to situations where Nigerians abroad were at their wits' end on how to make ends meet. He even said some of them had become destitute.According to him, some Nigerians abroad, as a way of surviving the hard times, had resorted to begging Nigerians at home for handouts. He added, 'This is what I have seen, this is what I have heard, and it is as bad as that,' Okogu said.However, according to a World Bank report, the dwindling remittances from Nigerians in the Diaspora will not only affect individuals but will also have a telling effect on the economy.According to the report, remittances are a major source of foreign flows which the country needs for economic development and poverty reduction.The report, Leveraging Migration for Africa: Remittances, Skills and Investments, released on March 30, 2011, revealed that remittance inflows to Africa quadrupled between 1990 and 2010, reaching nearly $40 billion in 2010, equivalent to 2.6 percent of the continent's gross domestic product (GDP) in 2009.It states further, 'At the macro level, remittances are a large and stable source of external finance for African countries that improves their creditworthiness and access to capital. In many African countries, these flows exceed FDI, portfolio equity, and debt flows; in some countries they are equal in size to official aid. Remittances tend to be more stable than other sources of foreign exchange, and they are often countercyclical, helping sustain consumption and investment during downturns and performing the role of a shock absorber. These beneficial effects of remittances improve sovereign creditworthiness and the external debt sustainability of African countries. Securitization of future remittance flows can increase the access of African banks and firms to international capital markets; it can also be used to fund longer-term development projects, such as infrastructure and low-income housing.'The report also links remittances from Africans in foreign land to reductions in poverty, increased household resources devoted to investment, and improved health and education outcomes.'Migrant remittances help smooth household consumption and act as a form of insurance for households facing shocks to their income and livelihood caused by drought, famine, and other natural disasters. Household surveys in Africa show that remittance-receiving households have greater access to secondary and tertiary education, health services, information and communication technology, and banking than households that do not receive remittances,' it says.The report also shows that the average amount of remittances received by households from outside the continent is larger than that of intraregional and domestic remittances. This shows that support from relations abroad is greater from support from relations within the continent.Speaking on the likely effect of the development on the country, a Texas, United States of America-based professor of Economics, Marshal Owolabi, said the trend would have significant effects on the people and the nation.'For the avoidance of doubt, remittances from Nigerians in the Diaspora contributed about 5.5 per cent to the GDP in 2009. That is a lot. With this development, so many people in the country would have their support system cut off as there are many who are dependent on these remittances for survival. They have no other means and that is very serious,' he said.Going into basics, he stated that with the lack of any meaningful safety net for the poor in the country, what the decline in the remittances would translate to would be that some old people would become destitute and might actually begin to beg for alms to survive.'Consider a 75-year old woman who has come to see the remittance by her son as her means of livelihood and suddenly the son is laid off in his place of work abroad and can no longer meet his obligations to his mother. What would become the lot of the woman' With government not having any assistance to give to the old, the woman would need to seek the help of others to survive. At that age, what can a person do' I am aware that many old people rely on the remittances from abroad, now that those remitting have nothing to remit what would the beneficiaries do than to beg, especially if they are too old to work',' he asked.The academic also said he foresaw a situation where many young ladies would take to prostitution sequel to the development.He explained that many Nigerians lacked the ability to think issues through but were always eager to get out of any problem without necessarily solving the problem. So, young ladies being supported by siblings or other relations living abroad who might be affected by the decline in the remittances might decide to engage in prostitution as a stop gap strategy, he said.Owolabi also said the development could result in many projects, building and others, being abandoned in the country. According to him, many of those living abroad who were affected by the downturn of the economies of Western countries might have some ongoing projects in the country which they would have to abandon because of paucity of funds.Also commenting on the development, Mr Tokunbo James, a property developer in Ibadan, said the built industry was already feeling the effect of the global economic meltdown.According to him, 'Ordinarily, towards Christmas, a number of Nigerians living abroad would want to come back home to celebrate with their families. When they come like that, they usually would want to invest in properties. But this year, there has been a lull in the property market and I can trace that to the economic crises abroad which have affected the income of Nigerians living abroad.'The money market is not immune from the remittance crisis, if the word of Yahaya Mandara, a bureau de change operator, is anything to go by.According to him, 'Usually by now, we should have had a crash in the value of dollar and other foreign currencies but that has not been the case this year because there has been a reduction in the amount of foreign currencies that gets in to the market from these people living abroad. You know that many of the beneficiaries rely on those of us operating bureau de change to change their foreign currencies but we have not had so much of that this time and I think it is because of the fact that many Nigerians living overseas are affected by the economic crises going on in those countries.'As a way out of the doldrums, Owolabi would want the government to institute some safety nets in the country as succour, especially for older people.'What manner of people would subject their older ones to inhuman treatment at the twilight of their years' The government has to look for ways through which the old ones would have access to state support in terms of health provision and even economic support. That is the least we can do for them,' he said.He also advised the government to take the provision of jobs seriously.'I am aware that there s a limit to what the government can do in terms of job provision but the least it can do is to provide an enabling environment for businesses to thrive in the country. If that is done and the macro economy is strengthened there would not be too much dependence on remittances from foreign countries,' he posited.
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