Almost everyone in private institutions understand some of the regulatory difficulties that central banks face when opening the market to new players and allowing a more diverse and competitive market to grow, while promoting innovation and transparency. Regulators in many countries are convening broadly-based industry councils to hear the market players and build a dialogue that benefits the country and the users of these financial services, within the country and internationally.


Nigerians can be found in most countries of the world. Nigerians are numerous in the United States and the United Kingdom, followed by in South Africa, the United Arab Emirates (UAE) and other European countries such as Italy and Spain. Finding Nigerians in South America lately has been a surprise to me. Talking to a group of them in Chile, as they were selling Chinese goods in the street, was very interesting. They are Igbo, one of the three main tribes, along with the Yorubas and Houzas. So is my friend Uche Agbor, owner of Ark Technologies, an ATM/Kiosk fintech in Lagos, to whom I owe most of my cultural understanding of Nigeria and its people. Uche adds: “Most Nigerians are entrepreneurs, resourceful, always working, hustling; Igbos in particular. I travel a lot and I found Nigerians doing business everywhere. Education is also critical for us.”

Highly entrepreneurial, Nigerians do well in most countries where they land. As a survey showed, Nigerians in the U.S. are one of the highest educated migration groups. The Migration Policy Institute found that 29 per cent of the Nigerian diaspora older than 25, holds a master’s degree, PhD or an advanced professional degree, in comparison to 11 per cent of the U.S. population overall. This survey was based on an analysis of the U.S. census bureau data for 2009 to 2013 showing that India-born immigrants were in the first place. These facts, plus the tight family associations Nigerians have, also mean that they tend to male a slightly higher remittance back home, on the average, than other migrant groups.

How Large Is the Nigerian Diaspora?

How large the Nigerian diaspora is, is anyone’s guess, with estimates ranging from two million to 15 Million. The Nigerian Diaspora Commission (NDC) appointed its first chairman and chief executive officer, Hon. Abike Dabiri-Erewa, in November 2018. As the NDC sets to unite all Nigerians abroad, coordinate their potential contributions to the country and advocate for their rights and needs at home, it might also shed light on the number of Nigerians abroad. The NDC “has the responsibility to coordinate and organise Nigerians in and from the Diaspora to contribute human capital and material resources, including their expertise, for the development of Nigeria and its constituent states,” said Senator Ita Enang when officially announcing the passage of the bill that created the NDC.

The largest Nigerian diaspora community is in the U.S., with around 400,000 people, followed by the U.K. with more than 200,000 persons. We must note that Nigeria is the third largest Commonwealth country by population and the English language is the main language there. The British Empire formally annexed the country in 1861 and it became a British protectorate in 1901. Colonisation lasted until 1960, when an independence movement succeeded in gaining Nigeria its independence, but political turmoil and military regimes went on for nearly 40 years. Nigerian emigration can be divided into four stages: the civil and political unrest in Nigeria in the ’60s, the downfall of the petroleum boom in the 80s, the mid-1990s with the dictatorship of Sani Abacha and finally, the last 20 years of mass migration, that has accounted for 50 per cent of the Nigerians now in the U.K. and the U.S., having arrived these destinations in this latest period.

MPI, in a June 2015 document, reported that there were 376,000 Nigerians immigrants and their children living in the U.S. and that was the largest source of African immigration to the country. Of those, around 55 per cent were first generation Nigerians and the rest comprised mostly of second generation Nigerians (62 per cent having both Nigerian parents).

The largest number of Nigerians are found in Texas (Houston, Sugar Land, Baytown and Dallas Fort Worth) and the New York-New Jersey Metropolitan Area. There are pockets of Nigerians in the Washington, DC Area (DC, VA, MD and WV), Atlanta (Sandy Springs, Marietta) and Chicago (Jolliet-Naperville).

An interesting fact in the publication is that it accounted for a large number of U.S.-based Nigerian Diaspora Organisations: 67 of them, with many different initiatives (social, cultural, health, women empowerment, etc.).

In the U.K., the latest published estimates are that 190,000 people that were born in Nigeria live in the U.K., 102,000 of them with Nigerian citizenship. It is reported that 75 per cent live in London and surrounding areas, in the boroughs of Lambeth and Southwark with Peckham – one of the most diverse areas of the country, with the most Nigerian-born people in Britain.

With 45 per cent of Nigerians adults saying in a survey in 2018 that they plan to move to another country within five years, the highest share among 12 countries surveyed across four continents, the Nigerian Diaspora will certainly grow even more in the next decade.

How large Is the Nigerian Remittance Market?

One of the most fundamental acts of Nigerians when leaving the country is in sending money back home. Family is key for Nigerians and supporting their families back home is the ultimate expression of love, commitment and the duty of Nigerians in the Diaspora. And in that sense, there is no country in Sub-Saharan Africa that receives more remittances than Nigeria, estimated by the World Bank at around $24.3 billion per year and 6 per cent of the GDP.

This makes Nigeria the sixth country in the world in terms of remittance inflows. Egypt at $28.9 billion per year is in fifth place, with Mexico, The Philippines, China and India on top. It is true of Nigeria, as it is of other countries, that many analysts dispute this estimate. But it must be stated that it is an estimate of remittances sent through formal channels and does not account for the informal channels. None of the executives of the institutions that I visited in Nigeria in July, in preparation for IMTC AFRICA 2019 in Lagos in September, could give me similar estimates, most of them gave figures of $10-15 billion. All did point out that they feel lately that there is a marked tendency for the informal sector to keep diminishing.


The United States sends about one-third of its remittances to Nigeria, followed by U.K. with 20 per cent, then Cameroon with 12 per cent and in that order, Italy with 5 per cent, Ghana and Spain with 4 per cent each, Germany and Benin with 3 per cent each, Ireland, Canada, Gabon, Saudi Arabia, South Africa and Niger with close to 2 per cent each.

UAE has, for sure, a top spot, but information is not available.

In the U.S., Nigerian remittances are in the seventh place, with Mexico topping the charts at $30 billion per year, followed by China ($16 billion), India ($12 billion), Philippines ($11 billion), Vietnam ($7 billion) and Guatemala ($7 billion).

The remittance market, in terms of companies abroad serving the Nigerian diaspora, is now growing at a fast pace, as remittance volumes to the country increase, partly due to organic growth and partly due to more funds being channeled through official channels.


Is the CBN Strategy To Formalise Remittances Working?

At the start of the decade, Western Union and a few Nigerian-owned companies and agents were serving the community. The reason for the narrow offering was a mix of apprehension and a lack of knowledge and understanding of the community. The need for a sound compliance system and the few choices in terms of the availability of paying institutions in the country was also a perceived problem. At the same time, the informal channels were dominated by Hawala-type institutions, exchanging naira in the country (used to pay remittances to beneficiaries), with US dollars abroad. This efficient system has been used by many traders and exchangers for decades, with the big fear always residing in what is the source of funds of the nairas in the country, where do these dollars abroad go and what type of business is this type of compensation abetting.

In August 2016, a decision of the Central Bank of Nigeria to bring order to the remittance market left, for a little while that year, only Western Union, MoneyGram and Ria Money Transfers, as the CBN approved international MTOs, to work in the official market. That brought a lot of turmoil to the market but in the subsequent months, more MTOs were approved. That’s all past and gone as the CBN relaxed its rules, more companies have been authorised to cater to the diaspora and pay through authorised institutions in the country. In my last count, there were more than 60 companies authorised by the CBN.

The remittance market, in terms of companies abroad serving the Nigerian diaspora, is now growing at a fast pace, as remittance volumes to the country increase, partly due to organic growth and partly due to more funds being channeled through official channels.

Aggregators are also now serving foreign MTOs, making it easier for companies to enter the Nigerian Market.

This chart from data taken from CBN shows this increase in remittances flowing through formal channels.

Will Mobile Wallets and the New Payment Services Banks (PSBs) Benefit Remittances?

It is still a wait-and-see situation. After CBN authorises payment services banks, it will take time to see the impact of tghis on the market of telcos being allowed finally to offer financial services, and remittances. As it has happened in many countries, the protection of banks against telcos overtaking the mobile service market, like it happened in Kenya, has led regulators, pressured by banks, to let these local banks to develop their mobile banking and payment offerings before they allow telcos to step in. It is a double-edge-sword-approach, where only time will tell how beneficial to the country and the population this scheme will be.

Telcos must develop separate entities as Payment Services Banks; it will be the first step upon receiving authorisation, as such the deployment of services will take time. I do think remittances could be impacted fairly soon if the right partnerships are built and marketing efforts are appropriate, both in the country and in the diaspora communities.

The challenge by PSBs could be strong. MTN Group’s Nigerian unit has just recently become the most valuable company on the Lagos Stock Exchange, just three months after listing. MTN Nigeria Communications Plc has a market capitalisation of US $7.8 billion and competes head-to-head for that spot with Dangote Cement Plc, owned by Mr. Aliko Dangote, Africa’s richest person. After MTN, Dangote and Nestle, two banks follow – GTBank and Zenith Bank – both with market capitalisations of less than U.S. $2 billion.

Are Nigerian Banks Really Committed To Facilitating Remittances?

This is a question that I often ask myself as I visit and/or meet banks at the IMTC Conferences due to the love/hate relationship that banks (in general) have always had with remittances. On one side is derisking or the non-provision of banking services to MTOs, fintechs and other non-bank financial services institutions. On the same side is the entrance and exit of large commercial banks in the remittance field, sometimes due to compliance worries that have more to do with the perceived expense and the lack of expertise to run a good risk management. The third is more compelling: As a Bank, do I really want remittance clients? Is their use of other financial services worthwhile to me, the bank? Are the foreign exchange differential received from remittances worthwhile?

I have always been a skeptic in terms of financial inclusion programmes that develop to be more government public relations and politics than real accomplishments. I do believe the importance of financial inclusion, as I believe remittances are a tool to make financial inclusion of remittance families a reality.


I have no doubt that presently there is a strong commitment by banks in Nigeria to facilitate remittances and develop partnerships with international MTOs. IMTC AFRICA in Lagos in September will be interesting in this sense. I always remind banks that MTOs form close relationships with their distribution network entities, even if nowadays the industry has become commoditised, and close partnerships mean developing joint marketing campaigns, a commitment to excellent customer service, attention to detail, etc.

Will Fintech Development Benefit Remittances?

I have no hesitation to say that the development of fintechs will benefit remittances as it is benefiting payments as a whole, both domestic and international, not only in the P2P space, but also in the near future, with the development of people-to-business (P2B) and business-to-business (B2B) sectors. As I discussed with Seun Folorunso from FintechNGR, the Fintech Association of Nigeria, our partners in IMTC AFRICA, Nigeria can lead the fintech field, not only because of the creativity in the sector and the support the association has received, but the untapped market, ready to see a boom. On September 24, in IMTC AFRICA’s Pre-Conference Forum on Remittances Innovation, we will explore with FintechNGR, its members and interested parties, how to spark innovation, develop partnerships, as well as open minds to the benefits of blockchain and virtual currencies.

With the work of the Blockchain Industry Association of Nigeria (BIAN), the Nigeria Blockchain Alliance (NBA) and the Blockchain Nigeria User Group (BNUG), we expect to see major developments of this technology in the country soon.

Although the bitcoin market is very active in Nigeria, the Central Bank doesn’t seem to have plans anytime soon to regulate bitcoin and other virtual currencies. BNUG has, in its website, a list of a dozen crypto exchanges in Nigeria.

A P2B service that should be available very soon in Nigeria is bill payment services offered to the diaspora. This service can grow exponentially when financial institutions develop a way to efficiently provide this service and offer it to international MTOs.

Will the Government Financial Inclusion Programme Impact Remittances?

I have always been a skeptic in terms of financial inclusion programmes that develop to be more government public relations and politics than real accomplishments. I do believe the importance of financial inclusion, as I believe remittances are a tool to make financial inclusion of remittance families a reality. I also think that microfinance institutions are the key to financial education, and then financial inclusion, and the help of government programmes on inclusion should be directed there, instead of to private institutions. In a meeting with the Association of Nonbank Microfinance Institution of Nigeria (ANMFIN) in Abuja in July, I was struck with the work they do and the thousands of microfinance groups they are helping to grow and develop.

How the financial inclusion initiative will impact remittances needs to be analysed, focusing on the projects that are set in motion.

Is Compliance An Important Aspect of Nigerian Remittances?

In any financial services institution nowadays, whether it is a bank, a non-bank, fintechs, virtual currency providers, compliance and risk management are key. And not only in the counter terrorism financing (CTF), which in Nigeria is a constant threat, and money laundering, another problem that no country in the world can claim to be free from, but also fraud, which sadly in Nigeria, is rampant. We all have received emails with fraudulent messages connected to Nigeria and other countries and it is surprising that still many people get tricked, especially in the U.S.

When discussing the Money Transfer Compliance Course in IMTC AFRICA’s Pre-Conference Day with the financial institutions in Nigeria that I visited in July this year, I felt that certain compliance actions taken in other countries, such as the U.S. Department of Justice against MoneyGram in November 2018, where not totally understood. And in the remittance industry, the work on both side of a remittance corridor, between the sending and the paying institution, is critical. International money transfer compliance expert, Zory Munoz, who will be an instructor teaching the course in Lagos in September 24, is very aware of this fact: “I have lost count of the number of countries and institutions I have visited across the world and even if most of them are keenly aware of the importance of compliance, there are many gaps that need to be addressed, as we work together to develop better systems to control and manage risk.”

MTOs and other institutions that cater to the Nigerian diaspora must get to know the bank verification number or “BVN” Programme in Nigeria that has placed the country as one of the top in the world with an advanced country-wide biometric system that began in 2014/ 2015. This is an advanced KYC system that certainly helps in providing reliable identification of remittance beneficiaries.

Can the Industry Work Together for the Benefit of Nigerians, Remittances and Nigeria As a Whole?

In my many talks with international MTOs and Nigerian financial institutions that led to the development of the IMTC AFRICA programme, I certainly feel that there are many individuals, both in Africa and abroad, that know the remittance industry in West Africa and want to genuinely contribute to the facilitation and formalisation of remittances. Almost everyone in private institutions understand some of the regulatory difficulties that central banks face when opening the market to new players and allowing a more diverse and competitive market to grow, while promoting innovation and transparency. Regulators in many countries are convening broadly-based industry councils to hear the market players and build a dialogue that benefits the country and the users of these financial services, within the country and internationally. In IMTC we are committed to helping this happen.

Hugo Cuevas-Mohr, the president and CEO of Mohr World Consulting (MWC) in Miami, Florida, is a director at IMTC.