Dynamics of remittance utilization by Nigerian households

Nigeria is currently ranked as the world’s top 10 remittance destination country with estimated official inflows of about US$10 billion. However, very little is still known about the end-use dynamics of these large inflows into Nigeria. Understanding these dynamics is central to any attempt to minimize the negative effects of migration, while optimizing its development potentials in the country. Using a new dataset involving 697 end-users of remittances collected at money-operating facilities in the country between March 2011 and December 2012, the study finds that the bulk of remittances flowing into Nigeria are primarily used to subsidize households’ consumption, education and health expenditures (74.3 per cent). However, intriguingly, when sources are disaggregated, the study finds that remittances originating from within Africa are driven by ‘pure altruism’, whereas those originating from the rest of the world are mostly driven by ‘purely selfish’ motives.

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