Recently, the Central Bank of Nigeria released a circular, amending and clarifying the procedure for receipt of diaspora remittances.
The circular had been issued in an effort to liberalise, simplify and improve the receipt and administration of diaspora remittances into Nigeria.
While this is a commendable policy, the federal government must take the driver seat to create opportunities that allow developed economies access to its pool of talented and vibrant young force through the study-abroad channel.
It is an open secret that Nigeria has one of the youngest populations in the world. Our median age is about 20. It has also been estimated that the country would be the third largest in the world by 2050.
This speaks volume to the amazing opportunity the country has to annex the talents of its young population – this time through export of human capital at the earliest time possible.
For context, this article will examine how emerging and developing nations can leverage international/ foreign education as an opportunity to facilitate emigration of their citizens to the developed nations thereby increasing their economic prosperity and resulting in increase in remittances to the country of origin.
The importance of diaspora remittances to any economy cannot be overemphasized. It has been a tool used to deepen the foreign exchange market, provide more liquidity, and ensure appreciation of value of the currency.
Not underestimating the overwhelming importance of diaspora remittances, a few emerging economies have intentionally designed systemic emigration programs that enable their citizens to earn foreign exchange and remit such to their home countries.
According to a report by PwC, the World Bank estimated that global remittances grew by 10% to $689 billion (2017: $633 billion) in 2018, with developing countries receiving 77% or $528 billion of the total inflows. According to the report, India, China, Mexico, the Philippines and Egypt are among the largest remittance recipients globally, collectively accounting for approximately 36% of total inflows.
For instance, at 9% of GDP, the level of remittances is high for the Philippines and set her apart from its Asian neighbours and other lower middle-income countries. Beside exports of goods and services, remittances are by some margin the largest source of foreign exchange for the Philippines.
However, through stringent policies on immigration and work permit, most developed economies, especially the G7, have shut the door of opportunities to the citizens of developing countries who desire to migrate to the “promised land”. This has no doubt made it difficult for the underdogs to journey into the land “flowing with milk and honey”.
Interestingly, international education has remained one of the widest doors of migration to the developed economies.
For example, according to UNESCO, the number of international students grew from 2 million in 2000 to over 5.3 million in 2017. More than half of these were enrolled in educational programmes in six countries: The United States of America, The United Kingdom, Australia, France, Germany and the Russian Federation. On top of the list of countries of origin of international students are: China, India, Republic of Korea, Nigeria and Saudi Arabia.
International education provides an easy access to economic prosperity for the citizens of the third world nations as the vast majority of the study destinations in the world have “study-work” and post-study work permit that allow students to work while studying and graduates to work for a while after completing their programmes respectively. For instance, Canada has a post-graduation work permit that allows international students to work in Canada for 3 years after completing their programmes.
The United Kingdom has recently reviewed its post-study work permit, allowing international students to work for 2 years post-graduation.
The new government in the United States is also reviewing its policy on immigration to enable more people, including students from the developing economies to study in the “God’s own country”.
The implication of this for the developing economies is obvious. The study-abroad opportunity does not only ensure access to quality education but improves the economic prosperity of the countries of origin in terms of remittances – as immigrants are able to make a decent living post study and remit income back to their home countries.
It is therefore recommended that the developing nations across Africa have deliberate programmes to support the exodus of its young population to study and work abroad.
This will not only translate into brain gain but also boost remittances. Such actionable programmes may include massive scholarships to study abroad, most especially for indigent but brilliant students. Special study-abroad loans at single digit interest rates can also be set aside by the CBN for the middle class to send their children abroad.
About the author:
Jide Ayegbusi is the CEO of Edusko Africa, an EdTech startup based in Nigeria.