ECONOMIC experts have urged the Central Bank of Nigeria (CBN) to redirect diaspora inflows into productive and revenue-generating sectors as a means of channelling capital into investments that will further support the economy.
While commending the apex bank on its effective regulatory reforms that successfully facilitate $11.12 billion in personal transfers into the country in the first half of 2026, the experts said the CBN’s strategic focus on formalising diaspora remittances had pushed monthly formal inflows to a record high of $947 million.
They noted that the trajectory brings Nigeria within a striking distance of the $1 billion monthly remittance target set by CBN Governor, Mr. Olayemi Cardoso.
Speaking with the Nigerian Tribune, an economic and financial expert based in the United States, Olaoluwa Adegboye, noted that foreign remittances represent vital cross-border capital inflows from diaspora populations to their home countries.
‘While many developing economies successfully harness these inflows for capital accumulation and economic expansion, the Nigerian dynamic presents a structural paradox: remittances function primarily as a cultural obligation rather than an engine for productive investment,’ he said.
He explained that in Nigeria, a significant portion of diaspora inflows is channelled into immediate consumption rather than wealth creation.
‘Capital is largely absorbed by recurring household welfare expenses, medical bills, school fees, and social ceremonies. While this provides a critical socio-economic safety net and buffers households against poverty, it yields minimal long-term multiplier effects for the broader macro-economy,’ Adegboye stated.
He added that a substantial share of diaspora investment is directed into residential real estate that frequently remains unoccupied or serves solely as vacation homes.
‘Instead of addressing the affordable housing deficit, this creates non-performing assets that lock up liquid capital in unproductive, illiquid structures,’ he said.
Analysts believe that the apex bank’s harmonisation of official and parallel market rates eliminated the primary incentive for using risky black-market operators.
They said under Cardoso, the CBN licenced more International Money Transfer Operators (IMTOs) and streamlined processing rules to lower transaction friction.
‘Introducing simplified digital identity tools like the Non-Resident Bank Verification Number (BVN) alongside dual-currency banking products made formal routing effortless for Nigerians abroad,’ an analyst noted.
Another economic expert, Idris Ahmed, said the apex bank’s tightening of requirements so that all formal remittances must clear through designated settlement accounts with authorised dealer banks significantly enhanced transparency.
‘However, widespread concerns over accountability, weak contract enforcement, and lack of trusted operational proxies deter Nigerians abroad from establishing formal small- and medium-sized enterprises (SMEs). The perceived risk of fund diversion turns entrepreneurial ambition into risk aversion.
‘Consequently, while remittances provide essential foreign exchange liquidity and social shock absorption, their transformative macroeconomic potential remains largely unrealised. To convert these flows from consumptive subsidies into sustainable economic drivers, policymakers must create institutional mechanisms such as diaspora investment funds, transparent public-private partnerships (PPPs), and structured mortgage-backed instruments that reduce trust deficits and redirect diaspora capital into productive, revenue-generating sectors,’ he stated.
At the 307th Monetary Policy Committee (MPC) meeting held a few days ago, CBN Governor, Mr. Olayemi Cardoso, said engagements with diaspora communities are getting better.
‘Unlike before, where you almost feel as if it is a one-way conversation, we are finding that many of our people, when they hear that we (CBN) are coming, they are genuinely interested in coming to listen to us.
‘As we will engage the diaspora communities, we will make them understand the very positive thigs that have been done.