Total sent money to Nigeria by Nigerian expatriates in 2021 is decreased by 27%, but this money transfer to the home country is considered much valuable in lockdown and disease outbreak. As a result, diaspora remittances inflows into Nigeria plummeted 27% year-on-year (YoY) to $17.2 billion in 2020 from $23.55 billion in 2019, indicating the devastating impact of the COVID-19 outbreak earnings of Nigerians living abroad. The 27% sharp decrease is 18.2 percentage points lower than the World Bank’s expected 8.8% fall for both Nigeria and Sub-Saharan Africa.
Money transfers to Nigeria and other LMICs are expected to recover in 2021, rising by 5.6 percent to $470 billion, according to the World Bank. However, the prospect for remittances is as unpredictable as the effects of COVID-19 on global growth and disease control measures. Remittances have traditionally been counter-cyclical, with employees sending more money home during times of crisis and suffering. However, this time the virus has spread to all countries, adding to the uncertainty.
What Is The Regional Trend Of Renittnace In Sub-Saharan Africa?
In 2019, remittances to Sub-Saharan Africa fell by 0.5 percent to $48 billion, a modest decrease. Moreover, remittance flows to the region are predicted to drop by 23.1 percent in 2020, to $37 billion, due to the COVID-19 crisis, before recovering by 4% in 2021. But during the lockdown, migrants preferred way of money transaction was to send money to Nigeria online, and this digital trend got a boost. The expected drop can be linked to a number of causes, including the coronavirus outbreak in key African migration destinations such as the EU, the United States, the Middle East, and China.
These large economies host many Sub-Saharan African migrants and account for over a quarter of overall online money transfer to Nigeria and other sub-Saharan Africa. In addition to the pandemic’s effects, many nations in Eastern Africa face a catastrophic outbreak of desert locusts, which are destroying crops and jeopardizing the region’s food production. Costs of remittance: In the first quarter of 2020, sending $200 in remittances to the region cost an average of 8.9%, a slight reduction from the average cost of 9.25 percent a year ago. The most costly corridors can be found primarily in Southern Africa, with charges as high as 20%. The less expensive corridors, on the other hand, had average expenses of less than 3.6 percent.