Brain Drain: IMF Approves "Japa" as Catalyst for Remittances, Foreign Investment in Nigeria
- The IMF has predicted that brain drain in Nigeria will drive remittances and foreign investments
- A director at IMF urged the Nigerian government to explore opportunities from the immigration of its people
- He, however, emphasised the necessity for the government to create incentives for the youth to remain in the country
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Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
The International Monetary Fund (IMF) has urged the Federal Government of Nigeria to take advantage of the brain drain issue in the country.
Speaking on the subject, Abebe Selassie, the Director of the Africa Department of the IMF, said that the Nigerian government must begin to look at the positive side of the trend, which has sparked the widely popular "Japa syndrome".
Source: UGC
The word "japa" refers to the ongoing migration of middle-class and highly skilled Nigerians, a phenomenon that began in earnest during the late 1980s and early 1990s.
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Initially, this trend was predominantly observed in specific professions; however, it has since expanded to encompass a broader spectrum of individuals, primarily due to the introduction of visa programs designed to address labour shortages in developed countries.
IMF examines the positive impacts of brain drain
During a session at the ongoing IMF-World Bank annual meetings in Marrakesh, Morocco, Selassie discussed the ramifications of brain drain on Nigeria, according to TheCable.
He pointed out that the phenomenon could offer advantages to the Nigerian government through increased investments and crucial remittances, which have become increasingly significant for various African nations.
Selassie said:
Yes, it is a drain, but I think we also need to see the ways in which we can have people outside the continent contributing back to the continent
The director of the IMF remarked that it is challenging to prevent individuals from relocating.
He noted that once they have moved abroad, governments can explore avenues to ensure their ongoing contributions, such as the significant role of remittances for numerous countries.
He added:
Also finding ways in which you can attract more investment perhaps is also another way that we can work on once people have left the continent.
In an earlier report by Legit.ng report, a study by the World Bank revealed that in 2022, Nigerians living abroad sent a remarkable $20 billion back home, marking the highest remittance figure within the sub-Saharan African region.
Selassie emphasised the necessity for the government to create incentives for the youth to remain in the country, underscoring the importance of instituting economic reforms.
These reforms should not solely revolve around attracting foreign investments but should also aim to empower and enable the nation's citizens to prosper.
Agreeing with the IMF executive, Ifeanyi Jeremiah Ubah, Head of Research at Comercio Partner, told Legit.ng that as more people immigrate from Nigeria, remittances to the country can only get better.
He said:
As an increasing number of Nigerians seek opportunities abroad due to the country's challenging economic conditions, their remittances' role in supporting the Nigerian economy remains vital.
The remarkable growth of these financial contributions has provided essential support to dependents, enabling them to meet fundamental requirements, access education, and healthcare, and explore entrepreneurial ventures.
He further mentioned that they had received a cumulative sum of $952 million in direct remittances from Nigerians residing overseas during the initial half of 2023.
It is worth noting that this figure represents only a fraction of the total, as some Nigerians opt for alternative channels like cryptocurrency platforms or informal networks for their remittances.
CBN urges Nigerians abroad to send money home using e-Naira
Legit.ng earlier reported that the Central Bank of Nigeria (CBN) encouraged Nigerians living abroad to consider utilising the e-Naira as a payment method for receiving diaspora remittances.
The apex bank stated this in its circular titled "Operational Framework for eNaira Payment Option to Recipients of Diaspora Remittances," dated June 15, 2023.
As a result, commercial banks have received directives to provide account information for receiving foreign currency from International Money Transfer Operators (IMTOs).
It is important to note that the CBN emphasises the optional nature of receiving diaspora remittances in eNaira, with the digital currency payout option coexisting alongside the traditional dollar payout.
Source: Legit.ng
