World Bank on glass building. Mirrored sky and city modern facade. Global capital, business, finance, economy, banking and money concept 3D rendering animation.
A recent report has revealed that Nigerians in the Diaspora remitted the sum of $20.1 billion in 2022, with the current official market rate of N767 per US dollar, the amount is equivalent to N15.3 trillion.
Not only do remittances aid in the prosperity of individual households by helping to pay for things like food, education, and other bills, but they are also vital to the prosperity of many developing economies around the world.
The World Bank report said remittance flows to Sub-Saharan Africa grew to $54 billion in 2022, a 6.1 per cent increase from the preceding year.
The report said regional growth in remittances was largely driven by strong remittance growth in Ghana (11.9 per cent), Kenya (8.5 per cent), Tanzania (25 per cent), Uganda (17.3 per cent), and Rwanda (21.2 per cent).
It added the increase in remittance flows to the region supported the current accounts of several African countries dealing with food insecurity, supply chain disruptions, severe drought (Horn of Africa), floods (in Nigeria, Chad, Niger, Burkina Faso, Mali, and Cameroon), and debt-servicing difficulties.
In 2023, growth in remittances is expected to ease to 1.3 per cent, the World Bank said.
Remittances, usually understood as the money or goods that migrants send back to families and friends in origin countries, are often the most direct and well-known link between migration and development, the World Bank said.
- Barge operators oppose NPA’s collection of taxes, charges in dollars
- Ticket Sale In Dollars: FG Loses Battle To Foreign Airlines
- Central banks to boost flow of US dollars amid market unease
The World Bank provides annual estimates of remittance flows globally (and bilaterally), based on national balance of payment statistics produced by central Banks and compiled by the International Monetary Fund (IMF).
Remittances to Nigeria accounted for about 38 per cent ($20.1 billion) of total remittance inflows to the Sub-Saharan Africa region.
Ghana and Kenya are behind, receiving $4.7 and $4.1 billion respectively.
Zimbabwe recorded $3.1 billion, followed by Senegal, $2.5 billion, Democratic Republic of Congo, $1.7 billion; Sudan, $1.5 billion; Uganda, $1.3 billion; Mali, $1.1 billion; and South Africa, $900 million.
Globally, remittance flows to low- and middle-income countries increased by 8 per cent, to reach $647 billion in 2022.
“This is a remarkable increase,” the World Bank said, “given that it followed a 10.6 per cent growth rate in 2021 and the economic environment seemed difficult due to slowing economies around the world, inflation, and the war in Ukraine,” it said.
“Remittances are estimated to grow by 1.4 per cent to $656 billion in 2023 as economic activity in remittance source countries is set to soften, limiting employment and wage gains for migrants.”
In the post-COVID period of slower economic growth and falling foreign direct investments, remittance inflows have become more important to countries and households, given their resilience as a source of external financing.
“Remittances are highly complementary to government cash transfers and essential to households during times of need,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.
“The World Bank is leading analytical and operational work on global migration to facilitate remittance flows and reduce costs.”
According to the Migration and Development Briefs, last year’s remittances were supported by strong oil prices in the Gulf Cooperation Council (GCC) countries, which increased migrants’ incomes; large money transfers from the Russian Federation to countries in Central Asia; and the strong labour market in the United States and advanced migrant destination economies.
Globally, the top recipient countries for remittances in 2022 were India (receiving $111 billion), Mexico ($61 billion), China ($51 billion), the Philippines ($38 billion), Pakistan ($30 billion), Egypt ($28.3 billion); Bangladesh ($21.5 billion), and Nigeria ($20.1 billion).
“Remittances have become a financial lifeline in many economies through the pandemic and will become even more so in the foreseeable future,” said Dilip Ratha, lead author of the report on migration and remittances.
“We have stepped up collaborations with source and recipient countries to improve data and leverage remittances to mobilise private sector capital through diaspora bonds and improved sovereign ratings.”
The Migration and Development Briefs report updates on migration and remittance flows as well as salient policy developments in the area of international migration and development