…as World Bank projects $630bn year-end 2022EkehKalu
Remittance inflows from Nigerians in the Diaspora rose by 11.2 per cent to $19.2billion in 2021 from $17.21billion in the previous year, the World Bank has said. The World Bank, which stated this in its latest “Migration and Development Brief” released yesterday, also disclosed that remittance inflows jumped 14.1 per cent to $49 billion in sub-Saharan Africa in 2021—“more than erasing the falloff of 8.1 per cent recorded in the prior year and representing the strongest gain since 2018.” According to the Bretton Woods institution, “factors supporting a return to growth include economic activity in Europe and the United States, which remained firm, and a restoration of recorded in flows to Nigeria, which had slipped by about 28 per cent in 2020 due to increased use of informal channels. Recorded flows to Nigeria advanced by ahealthy 11.2per cent in 2021 to $19.2 billion, while flows to sub-Saharan Africa excluding Nigeria surged 16 per cent to $30 billion in the year.”
Similarly, the Multilateral Development Bank stated that remittance flows to Low- and Middle-Income Countries(LMICs) registered arobustgainof 8.6percentto reach $605 billion in 2021. It said: “Remittances are a major source of external finance to LMICs, compared to Foreign Direct Investment (FDI), Official Development Assistance (ODA), and portfolio investments. In the recession year 2020, remittances proved resilient and were the paramount source of international financing for developing countries, as FDI dropped 12 per cent on the back of declining global activity.
Excluding China, the largest recipient of FDI, remittances have been the largest source of external finance for LMICs since 2016 and have measured about three times the size of ODA for over a decade.” The bank further explained that the near-record growth of remittance flows to LMICs last year was driven primarily by migrants wanting to send money to support their families facing hardships back home.
It also noted the migrants’ ability to send remittances was “in turn, enabled by strong economic activity and employment levels in many large host countries that implemented fiscal stimulus programmes.” It predicted that remittance flows to (LMICs) would increase by 4.2 per cent to reach $630 billion in 2022 while sub-Saharan Africa’s will rise to $53 from $49billion in 2021. The World Bank, however, said that, globally, the average cost of sending $200 was six per cent in the fourth quarter of 2021, which is double the SDG target of three per cent, adding that “it is cheapest to send money to South Asia (4.3 percent) andmost expensivetosendto sub-Saharan Africa (7.8 percent).” Itemphasisedthat“lowering remittance fees by even two percentage points would translateinto $12 billion of annual savings forinternational migrants from the LMICs.”