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World Bank: Nigeria responsible for over 40 percent diaspora remittances in Sub Saharan Africa

FILE PHOTO - A picture illustration shows U.S. 100 dollar bank notes taken in Tokyo August 2, 2011. REUTERS-Yuriko Nakao-File Photo

The World Bank says Nigeria is responsible for over 40 percent of diaspora remittances in Sub Saharan Africa (SSA).

In a statement on Wednesday, the Washington-based financial institution said remittances to SSA declined by an estimated 12.5 percent in 2020 to $42 billion. The decline was almost entirely due to a 27.7 percent decline in remittance flows to Nigeria,

“Remittances to Sub-Saharan Africa declined by an estimated 12.5 percent in 2020 to $42 billion,” the statement read.

“The decline was almost entirely due to a 27.7 percent decline in remittance flows to Nigeria, which alone accounted for over 40 percent of remittance flows to the region.

“Excluding Nigeria, remittance flows to Sub-Saharan African increased by 2.3 percent.

“Remittance growth was reported in Zambia (37 percent), Mozambique (16 percent), Kenya (9 percent) and Ghana (5 percent).”

On remittance costs, the World Bank noted that “Africa remains the most expensive region to send money to, where sending $200 costs an average of 8.2 percent in the fourth quarter of 2020”.

It said despite the impact of COVID-19 on global economy, remittance flows remained resilient in 2020 as low and middle-income countries reached $540 billion — representing a 1.6 percent dip from $548 billion recorded in 2019.

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

“It was also far lower than the fall in foreign direct investment (FDI) flows to low- and middle-income countries, which, excluding flows to China, fell by over 30 percent in 2020.

“As a result, remittance flows to low- and middle-income countries surpassed the sum of FDI ($259 billion) and overseas development assistance ($179 billion) in 2020.”

The Bretton Woods institution projects a 2.6 percent increase in remittance for low and middle-income countries to $553 billion in 2021.

It said further increase of $565 billion will be recorded in 2022.

“With global growth expected to rebound further in 2021 and 2022, remittance flows to low- and middle-income countries are expected to increase by 2.6 percent to $553 billion in 2021 and by 2.2 percent to $565 billion in 2022,” the statement added.

“Even as many high-income nations have made significant progress in vaccinating their populations, infections are still high in several large developing economies and the outlook for remittances remains uncertain.”

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