Nigeria recorded stronger remittance flow of $20.945 billion in the year 2022, according to the latest World Bank Migration and Development Brief released at the weekend.
The 2022 figure represented an estimated 4.2 percent of the country’s Gross Domestic Product (GDP) for the year, a growth of 7.5 percent over the $19.483 billion reported last year, which was 13.22 percent that of 2020. The growth in Nigeria’s 2022 remittance inflows was however better than the estimated 5 percent growth for low- and middle-income countries (LMICs), sharply lower than the 10.2% increase in 2021.
The figure, apparently helped by the Central Bank of Nigeria (CBN) “Naira 4 Dollar Scheme” introduced in March last year to incentivize funds transfers through licenced international money transfers organisations such that the beneficiary receives N5.00 from the apex bank per Dollar from May 8, 2021.
According to data published by the Global Knowledge Partnership on Migration and Development (KNOMAD), remittance flows to Nigeria rose to its pick of $24.311 billion in 2018, then dropped to $23.809 billion in 2019. The drop was however sharper the following year, when it closed at $17.208 billion due to impact of the COVID-19 pandemic outbreak, before rising to $19.483 billion last year.
In 2022, for the first time a single country, India, is on track to receive more than $100 billion in yearly remittances, almost double the $53 billion that flowed into Sub-Saharan Africa, the region most highly exposed to the effects of the global crisis, which grew by about 5.2%, compared with 16.4% last year (due mainly to strong flows to Nigeria and Kenya). Remittances to Africa in 2023 are projected to soften to 3.9% growth as adverse conditions in the global environment and regional source countries persist.
While the largest recipients of remittances in Africa during 2022—measured in US dollar terms, the report noted, include Nigeria, Ghana, Kenya, as inflows to low- and middle-income countries (LMICs) withstood global headwinds in 2022, growing an estimated 5% to $626 billion, sharply lower than the 10.2% increase in 2021, according to the latest brief.
Remittances, it noted, remain a vital source of household income for LMICs, helping to alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher school enrollment rates for children in disadvantaged households.
“Studies show that remittances help recipient households to build resilience, for example through financing better housing and to cope with the losses in the aftermath of disasters,” according to the statement.
Remittance flows to developing regions were shaped by several factors in 2022, including the reopening of host economies as the COVID-19 pandemic receded supported migrants’ employment and their ability to continue helping their families back home. Rising prices, on the other hand, adversely affected migrants’ real incomes.
In countries that experienced scarcity of foreign exchange and multiple exchange rates like Nigeria, the report said officially recorded remittance flows declined as flows shifted to alternative channels offering better rates.
The World Bank statement quoted Michal Rutkowski, its Global Director for Social Protection and Jobs as saying “migrants help to ease tight labor markets in host countries while supporting their families through remittances. Inclusive social protection policies have helped workers weather the income and employment uncertainties created by the COVID-19 pandemic. Such policies have global impacts through remittances and must be continued.”
By region, Africa stands to be the most severely exposed to the concurrent crises, including severe drought and spikes in global energy and food commodity prices, the bank added.