Diaspora remittances to Nigeria increased by 11.2% in 2021 to $19.2 billion, compared to $17.21 billion recorded in 2020.
The figure was highest in sub-Saharan Africa (SSA), which saw a 14.1% jump to $49 billion.
This was in the World Bank’s Migration and Development Brief released over the weekend.
According to the publication, the Central Bank of Nigeria’s Naira-4-Dollar policy and other interventions have been partly responsible for the increase in Diaspora remittances in the country.
The World Bank added that “the stabilization of the naira against the dollar in a range of 410 to 415 to the dollar over the past year has also contributed to the recovery in recorded inflows”.
The publication said the 14% rise recorded by the SSA more than erased “the 8% drop recorded in the pandemic year of 2020 – and representing the largest gain since 2018”.
According to the World Bank’s Migration and Development Brief, “Remittances to Africa have maintained a strong secular upward trend within a few years, growing by an average of 11% per year over the period 2004–21. However, remittances never proved to be dominant among external financial flows for the region, eclipsed by ODA during the period (of around $9 billion in 2021) and robust FDI inflows. , but quite volatile, largely directed towards resource-rich economies (the surge in FDI in 2021 reflects a mega M&A deal in South Africa). Portfolio investment inflows have always been volatile, given the region’s debt difficulties; and portfolio flows have now been affected by the onset of the Russian-Ukrainian crisis.
The publication lists the top five receiving countries for remittances in 2021, namely India, Mexico, China, the Philippines and Egypt, adding that remittances account for very high shares of GDP in Lebanon ( 54%), Tonga (44%). ), Tajikistan (34%), Kyrgyz Republic (33%) and Samoa (32%).
According to the World Bank, officially recorded remittance flows to low- and middle-income countries (LMICs) are expected to increase by 4.2% in the current year to reach $630 billion, after an almost record 8.6% in 2021.
The publication added that the average cost of sending $200 was 6% in the fourth quarter of 2021, double the SDG target of 3%, noting that it is the cheapest to send money. money to South Asia (4.3%) and the most expensive to send to sub-Saharan Africa (7.8%).
Commenting on the cost of remittances, Dilip Ratha, lead author of the Migration and Remittances report, said: “Reducing remittance fees by 2 percentage points would potentially result in $12 billion in annual savings for international migrants from LMICs and $400 million for migrants. and refugees from Ukraine. “Cross-border payment systems, however, are likely to become multi-polar and less interoperable, which will slow progress in reducing remittance fees.”
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