By Dr Felix Ijeh
Every festive season in Nigeria looks the same from the village lane to the city centres: caravans of diaspora visitors, new gadgets, new clothes, and brief spikes in local economic activity. For a short while, markets hum, food sells briskly, and money flows freely.
But if you look beyond the surface of celebration, a deeper economic transformation is quietly taking place — one with serious implications for Nigeria’s future growth and human capital formation.
Two faces of the diaspora: Investors vs. “quick money” returnees
Not all Nigerians abroad behave the same.
On one hand, many legally employed and professional migrants — doctors, engineers, academics, ICT specialists, and formal workers do not spend lavishly when they visit. They remit steadily, often supporting family education, housing, healthcare, and even small businesses back home. These remittances are stabilizing lifelines for millions of households.
In 2024, officially recorded diaspora remittances to Nigeria reached about $20.93 billion; more than four times the value of Nigeria’s Foreign Direct Investment (FDI) that year.
On the other hand, a large share of returnees widely estimated by observers to be over 60–65% of the total migrant stock arrived through irregular or informal migration channels. These are often school dropouts or low-skilled workers, seeking escape from limited opportunities at home. They return with stories of easy money and symbols of success sometimes without the skills or networks to sustain it. The result? visible consumption, but limited productive engagement.
Remittances: A blessing with side effects
Nigeria’s remittance inflows are among the highest in Sub-Saharan Africa. In 2023 alone, Nigeria accounted for roughly 35% of all remittances to the region — about $19.5 billion — despite slower global growth and high costs of transfer.
These funds provide real support. They stabilize household budgets, pay school fees, and help families cope with inflation and insecurity.
But the pattern of spending matters. Research suggests that over 70% of remittance-receiving households use these funds largely for consumption in food, utilities, and immediate needs rather than investment or business creation. That’s understandable in hardship contexts, but it shapes incentives.
When visible symbols of “success” from abroad — flashy cars, imported goods, fast lifestyle are contrasted with local educators, artisans, and farmers who struggle to make ends meet, an implicit societal message is delivered: Work hard here, and you barely survive; go abroad and you come back rich (or at least rich-looking). This distorts aspirations, especially among youths.
The incentive problem: Why many youths choose “quick wins” over “hard work”
The village and city observation that young people are less willing to work locally and more inclined to chase fast money or irregular migration is not random. Economics calls this the incentive structure of a society.
When the expected return on formal education and local effort is low relative to the perceived payoff of migration and visible consumption, choices shift.
Instead of finishing school, gaining technical skills, building a business, or participating in value-creating sectors, many youths gravitate toward: informal gigs, social media hustles, speculation, or gambling on irregular migration.
This is not laziness; it is rational expectation under misaligned incentives — where perceived returns dominate realistic prospects.
What this means for the next generation
If nothing changes, we will witness a next wave of structural challenges:
Human capital erosion: Skilled teachers, technicians, and young professionals will be eroded as education becomes deprioritized.
The economy loses out on the very foundation of long-run growth — skilled labour.
Dependency culture: Households increasingly depend on remittances for basic survival, not empowerment. This undermines local entrepreneurship and productive investment.
Weak domestic investment: Cash inflows that circulate in consumption — instead of capital formation — do not build factories, farms, or productive enterprises.
A society where “coming back with foreign currency” is seen as the pinnacle of success is one where productive capacity shrinks even as visible consumption rises.
How do we correct the signal?
This is not a problem textbooks solve — but policy and culture do.
1. Restore dignity to local work
Government, businesses, and civil society must ensure that educators, farmers, health workers, and small artisans have livable incomes and pathways to prosperity. Without this, no incentive system will stick.
2. Incentivize productive investment of remittances
Diaspora remittances should be channeled into productive ventures — agro-processing, SMEs, education financing, housing finance schemes — not just consumption and short-term needs. Tax breaks, diaspora bonds, and diaspora mortgage programs can help.
3. Reframe success stories
Society must celebrate local achievers — innovators, exporters, educators, health champions — not just returnees with flashy consumption.
4. Create legal, structured migration pathways
Countries like the Philippines and Bangladesh have structured labour agreements that protect workers abroad and strengthen skills development. Nigeria needs similar frameworks to ensure that migration enhances skills, not just sends cash.
Conclusion:
The Economy We Teach Is the Economy We Become
Nigeria is at a crossroads:
Diaspora cash can be a bridge to development or a crutch that weakens the work ethic of a generation.
The choice is simple but tough:
Reward productive work at home, and diaspora success stories become engines of growth not just celebrations of consumption.
The next generation is watching. Let’s give them a reason to stay and build, not just spend and leave again.
Stay Informed, Stay Ahead.
