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General News of Tuesday, 16 August 2022

Source: www.nairametrics.com

Brain drain, tax and other economic effects of migration in Nigeria

Murtala Mohammed Airport, Ikeja, Lagos Murtala Mohammed Airport, Ikeja, Lagos

‘Japa’ and ‘Welcome to New Dispensation’ have been the anthems of many Nigerians as they look to leave the country. According to a Pew Research Centre study conducted in 2018, Nigeria tops the chat of people who plan to move to another country within the next 5 years with 48%, among the 12 countries sampled for the survey.

The survey also revealed that 55% of those who planned to leave Nigeria have gathered information about moving to another country, 34% have saved or borrowed money, 30% applied for necessary documents like a passport or Visa, and 14% have taken all necessary steps.

As more Nigerians are willing to leave through different routes like education and others, the economic impact on a country like Nigeria cannot be underestimated as Nigeria battles a high unemployment rate, inflation, insecurity, and others.

Brain drain

One of the economic effects of migration is that it leads to brain drain; a situation where a country witnesses a high number of its best hands or professionals leaving the country.

The crop of individuals leaving the country are youths who have been trained and graduated from university, some are young or in the middle level of their professional careers.

According to the African Union, Revised Policy Framework for Africa and Plan of Action (2018-2027), an estimated 70,000 skilled professionals emigrate from Africa each year. According to reports, Nigeria lost over 9000 medical doctors to the United Kingdom, Canada, and the U.S.A between 2016-2018. With a depleting number of medical doctors, Nigeria annually spends between $1.2 billion and $1.6 billion on medical tourism.

The brain drain cuts across many sectors and professions as funds are taken away from the country’s economy to boost that of another country, as the best hands are outside the country.

Nairametrics earlier reported that Nigerian companies spent over $55 billion on foreign professionals’ service in 10 years. On the other hand, the country only received $770.48 million for professionals in the country.

Tax

For anyone leaving the country, tax payment is one thing that comes to mind.

According to reports, 63.73% of the Internally Generated Revenue (IGR) in 2021 was from the Personal Income Tax (PIT), this is despite the statement of chairman of the Federal Inland Revenue Service (FIRS), that only a handful of Nigerians pay tax.

There are 15 million Nigerians in diaspora according to Abike Dabiri-Erewa, the head of the Nigeria Diaspora Commission (NIDCOM).

These statistics mean that Nigeria has lost 15 million people who will potentially pay tax and contribute to its economy.

Visa Fees

According to reports, Nigerians paid N9.78 million for a U.S.A visa in 2017. This fee only includes those who traveled as non-immigrants and excludes those who obtained immigrant visas or those whose application was rejected. The cost of processing a Visa varies by country.

In the U.S.A it ranges between $160 to $265 depending on the type of visa. Also in the United Kingdom, it ranges from $132 to $1145 based on visa type. The more Nigerians are now willing to leave the country, the more they spend on Visa applications.

In a similar vein, the Central Bank of Nigeria (CBN) report shows that Nigerians spent at least $220.86 million on foreign education between December 2021 and February 2022, amidst the lingering ASUU strike and the broken Nigerian educational system.

The economic implication is that Nigerians spend more to get Visas from other countries and spend for renewals.

These amounts do not have a positive effect on the Nigerian economy.

The remittances from the diaspora seem to have a positive impact on the Nigerian economy as Nigerians living outside the country send money to their loved ones for upkeep, among other reasons.

With diaspora remittances set to hit $29 billion, it will have a positive economic impact as there will be an inflow of FX into the country and also increase the purchasing power of people as inflation bites harder in the country.

The desperation to leave the country has led to the rise of fake and fraudulent travel agents and agencies, swindling unsuspecting Nigerians of their hard-earned money.

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