The World Bank projects that Nigeria will lose $2 billion in remittances from its citizens in the diaspora.
The Migration and Development Brief 33 published by the World Bank and the Global Knowledge Partnership on Migration and Development (Knomad) projects report notedmthat Nigeria will receive $21.7 billion in remittances in 2020 as against the 23.8 billion recorded in 2019.
“Remittances are helping to address the impact on African households. Nigeria remains the largest recipient of remittances in the region, and is the seventh-largest recipient among LMICs, with projected remittances to decline to around $21.7 billion, a more than $2 billion drop compared with 2019,” the report read.
Remittances to low and middle-income countries (LMICs) are projected to decline by 7.2 per cent to $508 billion in 2020 and further decline by 7.5 per cent to $470 billion in 2021. The projected declines in remittances are the steepest in recent history, and steeper than the 5 per cent decline recorded during the 2009 global recession.
The foremost factors driving the declines were weak economic growth and uncertainties around jobs in migrant hosting countries, a weak oil price, and, in many remittance source countries, an unfavorable exchange rate against the US dollar.
According to the report, Sub-Saharan Africa is the costliest region to which to send remittances as sending $200 to countries in Sub-Saharan Africa cost an average 8.5 percent in the third-quarter of 2020, a decrease compared with the average cost of 9 percent recorded in 2019.
“The COVID-19 pandemic has made it more difficult for migrants to remit money to Sub-Saharan Africa using traditional or informal channels as most payments are still in cash and some money transfer operators are closed due to the crisis,” it said.
“The promotion of digital technology, which is cheaper than non-digital services, combined with a regulatory environment promoting competition in the remittances market, and relaxing money laundering regulations, are essential for Sub- Saharan countries to achieve the SDG target of 3 per cent by 2030.”