One recurring feature of Christmas in Nigeria is the I-Just-Got-Back (IJGB) phenomenon. In case this is new to you, let us enlighten you – IJGB is an acronym used to describe diaspora Nigerians whenever they visit the country, especially during the Yuletide season.
As you may know, many diaspora Nigerians live and work in high-income countries. And this increases their spending capacity whenever they visit Nigeria, invariably benefitting the economy by encouraging cash flow for retailers and service providers.
They’re important to the economy: The Nigerian diaspora also plays an important role in the country’s monetary policy through remittances.
Nairametrics earlier reported that Nigeria received $10.11 billion as diaspora remittances between January and June 2022, representing a 9.6% increase compared to $9.23 billion received during the comparable period last year.
The World Bank has estimated that foreign remittance into Nigeria will hit $20.9 billion by the end of 2022, compared to $19.5 billion in remittance inflow recorded in 2021, thus representing a 7.5% increase.
But what about their spending? Many Nigerians in Western countries have, over the past 12 months, seen their living standards reduce due to inflation triggered by many factors. Some of these factors include the impacts of quantitative easing monetary policy following the pandemic, the energy price hike due to Russia’s invasion of Ukraine, etc.
Nigerians in the UK recently got a bit of respite after the inflation rate in the country dropped 10.7% in November from 11.1% in October. But the economic challenges in the UK economy are far from over.
Nigerians in the United States have also had their fair share of economic challenges. But thankfully, inflation is easing as the US consumer price reduced more than expected to 7.1% in November, its lowest level since December 2021.
High Prices, falling disposable income: As consumers across the Western Hemisphere saw their spending increase to a 40-year high, they have also seen their standard of living decline.
In the same vein, their disposable income has dropped significantly, with the UK Government revealing that UK households could suffer a 7.1% fall in living standards over the next two years.
Real disposable income will fall by 4.3 per cent in the 2022-23 fiscal year, the biggest drop since records began in 1956-57.
These factors add up to how consumers may spend, as they reduce their expenses, which could see controlled spending to see how the start of the year goes for energy and food prices.
The bottom line: Despite the falling disposable income, remittances from diaspora Nigerians are still stable, which could also be factored by the increasing brain-capital flight from Nigeria.
Recall Nairametrics reported that Nigerian students’ visa approvals to the United Kingdom rose from 8,384 to 65,929 from the year ending 2019 to the year ending June 2022, a 686% increase.
Also reported is that Nigerian nationals emerged as the second-highest recipients of the United Kingdom’s Worker Visas between December 2019 to June 2022.
However, despite the positive prospects, diaspora Nigerians who decide to come home this Christmas may be more frugal with their spending than they usually are.
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