Inflows of remittance into Nigeria drops by 27.7% to $17.2bn – World Bank

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Factual Pursuit of Truth for Progress

 

A World Bank report has revealed a 27.7 percent decline to $17.2billion in remittances to Nigeria last year thus leading to inflows to sub-Saharan Africa dropping by 12.5 per cent to $42 billion in 2020.

According to the bank’s “Migration and Development Brief” released on Wednesday, excluding flows to Nigeria, remittance to sub-Saharan Africa increased by 2.3 per cent, demonstrating resilience.

It stated: “Remittance flows to sub-Saharan Africa were estimated to have declined by 12.5 per cent in 2020. The decline was almost entirely due to a 27.7 per cent decline in re-mittance flows to Nigeria, which alone accounted for over 40 per cent of remittance flows to the region.

“Excluding Nigeria, remittance flows to sub-Saharan African increased by 2.3 per cent, demonstrating resilience at a time of crisis.”

The report also stated that remittance flows to the region were affected by COVID-19, especially by restricted mobility measures and the employment situation in the main host countries.

However, for Nigeria, it stated: “The decrease inflows to Nigeria is partly attributable to a high (27 per cent) premium on the naira/$ exchange rate in informal markets, and an unexpected policy directive requiring the agent banks of money transfer operators to pay out in US dollars (or hard currency) rather than naira.”

More details from the report said remittance flows to the region are projected to rise by 2.6 per cent ($43 billion) and 1.6 per cent ($44 billion) in 2021 and 2022, respectively, adding that “Remittances are expected to be supported by improving growth prospects in the United States and other high-income host countries.”

A report released a few days ago said: “Nigeria’s diaspora remittances will reach $22 billion by 2021, representing a year-on-year rise of five per cent. And then, a marginal year-on-year rise of two per cent in 2022 to $22.5 billion.”

Meanwhile, according to the World Bank report, global remittance flows remained resilient in 2020, registering a smaller decline than previously projected despite the pandemic.

Officially recorded remittance flows to low- and middle-income countries reached $540 billion in 2020, just 1.6 per cent below the 2019 total of $548 billion, the report said.

“The decline in recorded remittance flows in 2020 was smaller than the one during the 2009 global financial crisis (4.8 percent).”

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