Diaspora remittances to Nigeria dropped by $4.65 billion in one year, according to the World Bank Migration and Development report.
The report released on Wednesday showed that remittances dipped by 27.7 per cent from $21.45 billion in 2019 to $16.8 billion in 2020, representing $4.65 billion decline.
A breakdown of the Migration and Development report showed that remittances to sub-Saharan Africa declined by an estimated 12.5 per cent in 2020 to $42 billion.
The decline was due to a 27.7 per cent decline in remittance flows into Nigeria, which alone accounted for over 40 per cent of remittance flows into the region.
The World Bank said that excluding Nigeria, remittance flows into sub-Saharan Africa increased by 2.3 per cent.
Remittance growth was reported in Zambia (37 per cent), Mozambique (16 per cent), Kenya (nine per cent) and Ghana (five per cent).
Findings showed that the Central Bank of Nigeria (CBN) ’Naira for dollar for Scheme’ which gives N5 rebate on every $1 sent by Nigerians in diaspora to the country was instituted by the regulator to reverse the continued decline of remittances to the economy.
CBN Governor, Godwin Emefiele, explained that the policy was designed to increase transparency of remittance inflows into the economy and reduce rent-seeking activities. The apex bank has also approved 12 International Money Transfer Operators (IMTOs) to conduct remittance business.
Emefiele said the new policy is expected to enlarge the scope and scale of foreign exchange inflows into the country with a view to stabilizing the exchange rate and supporting accretion to external reserves. More importantly, he said it would provide an opportunity for Nigerians living abroad to make investments in their home country.
The Global Director of Social Protection and Jobs Global Practice at World Bank, Michal Rutkowski, explained that as COVID-19 continues to devastate families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable.
“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants,” he said.
Lead Author of the report on migration and remittances and head of The Global Knowledge Partnership on Migration and Development (KNOMAD), Dilip Ratha, said the resilience of remittance flows is remarkable.
“Remittances are helping to meet families’ increased need for livelihood support.
“They can no longer be treated as small change. The World Bank has been monitoring migration and remittance flows for nearly two decades, and we are working with governments and partners to produce timely data and make remittance flows even more productive,” Ratha said.
The report says sub-Saharan Africa remains the most expensive region to send money to, where sending $200 attracted an average of 8.2 per cent in the fourth quarter of 2020.
Within the region which experiences high intra-regional migration, it is expensive to send money from South Africa to Botswana (19.6 per cent), to Zimbabwe (14 per cent), and to Malawi (16 per cent).
The World Bank is assisting member states monitor the flow of remittances through various channels, the costs and convenience of sending money, and regulations to protect financial integrity that affect remittance flows. It is working with the G20 countries and the global community to reduce remittance costs and improve financial inclusion for the poor.