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Outlook on 2026 global remittances and Nigeria 23 Feb 2026

Global affairs are changing. The pace of change is rapid. But it is uncertain whether the Nigerian authorities are noting the changing landscapes – let alone responding adequately to them. This scepticism stems from the fact that changes in the domestic landscapes are hardly anticipated, often met with inadequate responses, or denied.

One area of potentially impactful global change in 2026 is migrant remittances. Three issues appear set to impact financial transfers by foreign workers or residents to their home countries in 2026 – and beyond.

The first is the 1 per cent tax placed on remittances in the United States, which was passed as a component of the Big Beautiful Bill last year. The new tax will add to the cost of sending remittances, which remains above the 3 per cent specified as a target of Goal 10 of the UN Sustainable Development Goals (SDGs). 

The US is the world’s largest source country, accounting for approximately 10 per cent of outbound global remittances. The new tax by the President Donald Trump administration will, therefore, affect a substantial portion of total remittances globally.

Second, immigration policies are also changing across key countries of origin for remittances, with the US, which has the largest number of migrants worldwide, leading the anti-immigration charge. President Trump has been expanding the scope of his administration’s crackdown on immigrants to include deportation, forced repatriation, refoulement, and expulsion. Legal residency status is no longer a guarantee of the continued stay of immigrants in the country. His administration recently announced an indefinite halt to the processing of US immigrant visas for 75 countries, including Nigeria. Before then, various restrictions have been applied to the processing of non-immigrant and student visas. 

Anti-immigrant sentiments are also growing in the UK and Germany, amongst key countries for outbound remittances. This will likely slow the growth of the financial transfer, if not drive its decline. Between 2010 and 2024, global remittances more than doubled, growing from $440 billion to $905 billion.

Third, multi-year data indicate a 17-month cycle for upward principal increases in remittances, according to Manuel Orozco, a specialist in migration, remittances and development at the Inter-American Dialogue. The current cycle started in October 2024. Therefore, remittances could slow by April 2026.

Relevant Nigerian policymakers and the populace should be concerned about these developments. Remittances are a major source of financing for both consumption and investment in the country. It often rivals the federal government’s annual budgets in magnitude. Official remittances to Nigeria in the last 10 years averaged $21 billion. The federal government’s total budget in that period averaged approximately $28 billion annually. 

Research indicates that 70 per cent of remittances to Nigeria are typically used for consumption. The remaining 30 per cent are used for investment-related activities. Therefore, a sharp decline in remittances could affect consumer and investment spending in the country. At a time when citizens are still undone by the inflationary impact of the government’s economic reform, a significant reduction in migrant remittance inflows to the country can be dire. By reducing dollar liquidity and accretion to the Central Bank of Nigeria’s foreign reserves, such a slowdown in foreign inflows can catalyse another episode of sharp depreciation of the local currency.

Following apprehension caused by the hostile immigration posture of the US government, migrants in the country increased remittances to their home countries in 2025. This growth catalyst is likely to now drive a decline in remittances in 2026, combined with the immigration crackdown. The extent to which Nigeria will be affected is unclear, with this year’s outlook still cloudy. President Trump has continued to implement his draconian policy. But the loss of a majority by his party in the November congressional midterm elections is likely to constrain him, as immigration has long been a polarising issue in the US Congress. Nevertheless, the disagreement is usually more about approach than objective.

The erratic nature of policy changes unfolding in the US and elsewhere challenges predictability. But policy changes are within the rights of countries – except where international laws and conventions are contravened. Although the US accounted for just 4.2 per cent of the world’s population in 2024, it accounted for 17.2 per cent of all migrants. The structural changes in the global economy, whereby developing countries are increasing their share of the world’s GDP, suggest a need for policy recalibration in countries losing ground.

For Nigeria, the authorities must continue to engage their US counterparts on mutually beneficial immigration and economic partnerships. This is both rational and pragmatic. One area Nigeria can do a lot to assuage the US’ concern is by doing more in the fight against terrorism in the country, while also cooperating with the US to prevent West Africa from becoming a breeding ground for global terrorism that may strike US interests in the subregion or its homeland.

However, reforms to rebuild confidence in vital public institutions, through their capacities to improve service delivery and security for the citizens, are crucial in Nigeria. The 32-month-long dalliance with inflationary and poverty-aggravating economic reforms should be reconsidered. The overarching reform agenda should prioritise significant improvements in power supply, education, healthcare and propensity for consumption; cut systemic corruption; reduce the high cost of doing business; and promote the rule of law.