‘Poor performance caused by 27.7% decline in flows to Nigeria’
Remittances to Sub-Saharan Africa fell by 12.5 per cent last year on account of 27.7 per cent decline in inflows to Nigeria, the World Bank has said.
The total remittances in 2020 stood at $42 billion compared with $48 billion inflows received by the region in 2019. Nigeria had reported $17.2 billion remittances in 2020 as against $23.55 billion recorded in the previous year.
According to the document the World Bank released yesterday, remittances to Sub-Saharan African countries, but Nigeria remained strong with 2.3 per cent improvement.
But the overall performance was pulled into the negative region by Nigeria, which accounts for 40 per cent of the total amount remitted to the region.
It noted an improvement in the shift from informal to formal remittance routes last year. This, it attributed to the closure of borders across the world, as part of measures to contain the spread of the COVID-19 pandemic.
“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 Africa increased by 2.3 per cent. Remittance growth was reported in Zambia (37 per cent), Mozambique (16 per cent), Kenya (9 per cent) and Ghana (5 per cent), the statement said.
The bank projected a 2.6 per cent growth in remittance flows to the region this year on the account of “improving prospects for growth in high-income countries”.
The World Bank regretted that Sub-Saharan Africa “remains the most expensive region to send money to, where sending $200 costs an average of 8.2 per cent in the fourth quarter of 2020”.
It added that the cost of remittances within the region is even higher.
“Within the region, which experiences high intra-regional migration, it is expensive to send money from South Africa to Botswana (19.6 per cent), Zimbabwe (14 per cent) and Malawi (16 per cent),” it disclosed.
The bank said remittance flows remained resilient last year despite COVID-19, registering a smaller decline than previously projected. According to the statement, flows to low- and middle-income countries was $540 billion in 2020, which was just 1.6 per cent lower than the $548 billion recorded in 2019
The drop in remittance flow to low- and middle-income regions was far lower than the fall in foreign direct investment (FDI) flows to the same countries last year. Excluding China, FDI flows to low- and middle-income countries fell by over 30 per cent in 2020.
In the same period reviewed, remittances to Latin America/the Caribbean, South Asia and the Middle East/North Africa grew by 6.5 per cent, 5.2 per cent and 2.3 per cent respectively. But like Sub-Sahara, East Asia/Pacific region and Europe/Central Asia received a cut of 7.9 per cent and 9.7 per cent respectively.