Wednesday, January 01, 2014

Nigeria in 2014: International Development assistant (or ODA) is not expected to increase but remittance will

Life was sweet when the leaders of the world's most powerful western economies pledged themselves to debt relief and aid to help poor countries in July 2005 when Britain hosted the G8 summit at Gleneagles. Growth was strong, asset prices were rising, and the financial crisis was two years away. Fast-forward to 2013, one thing was obvious when Britain chaired a similar G8 meeting at Lough Erne last summer: there will be no repeat of the commitment to double aid within five years. Money is tight. Most donour countries in the OECD are on their fiscal cliffs with characteristic high energy prices and compounded by their struggle to ensure financial solvency.

Since remittance exceeded foreign direct investment (FDI) and other development assistance (ODA) for the first time in 2012, remittance trend is seen to continue to play significant role in developing economies. In 2009, Nigeria received over $10 billion in remittances from citizens living in the diaspora and was ranked first among the top 10 remittance recipients in 2010 in Sub-Saharan Africa with average share of remittance to GDP of 10.4% between 2005-2011 (African Economic Outlook 2013; World Bank, 2011). The World Bank (2012) reported that the top recipients of officially recorded remittances for 2012 are India ($70 billion), China ($66 billion), the Philippines and Mexico ($24 billion each), and Nigeria ($21 billion). Although remittance has been identified to eradicate poverty among the recipient households (Chukwuone et al, 2012), little is known about its effects on job creation and employment especially for the young people. Remittance has its own unique way of addressing the challenges such as corruption that ODA and FDI face both in donour countries and recipient nations. Remittance is specific in use and carries efficient group/channel effects. It is expected that 2014 will be the year when social, fiscal and labour-market policy recommendations will be made to help in channelling the large amount of remittance in Nigeria for sustainable growth. This will fall in line with increasing international debate on how to reduce cost of remittance as well as help developing countries cope with falling ODAs.

Read the full article here: 10 Economic Highlights to look out for in Nigeria in 2014. Want to share you thoughts on the Nigerian Economy in 2014? You can drop your comment below or continue the discussion with on twitter 

reference list

No comments:

Post a Comment