The World Bank has said that remittance inflow to Nigeria declined by 28 per cent in 2020 due to the COVID-19 pandemic.
The bank added that remittance flows fell for Sub-Saharan Africa by 12.5 per cent, according to its Migration and Development Brief 33 Phase 11 entitled: “COVID-19 Crisis Through a Migration Lens’’ published on Thursday.
The report said the decline in remittance inflow to Nigeria was largely responsible for the fall in remittance flows to sub-Saharan Africa.
“The decline in flows to sub-Saharan Africa was almost entirely due to a 28 per cent decline in remittance flows to Nigeria.
“Excluding flows to Nigeria, remittances to sub-Saharan Africa increased by 2.3 per cent, demonstrating resilience,’’ the report stated.
According to the report, the relatively strong performance of remittance flows during the COVID-19 crisis has also highlighted the importance of timely availability of data.
It stated that given its growing significance as a source of external financing for low and middle-income countries, there was need for better collection of data on remittances.
It emphasised that there was need for better collection of data on remittances, in terms of frequency, timely reporting, and granularity by corridor and channel.
With global growth expected to rebound further in 2021 and 2022, remittance flows to low and middle- income countries are expected to increase by 2.6 per cent to 553 billion dollars in 2021 and by 2.2 per cent to 565 billion dollars in 2022.
The report stated that global average cost of sending $200 remained high at 6.5 per cent in the fourth quarter of 2020, more than double the Sustainable Development Goals (SDGs) target of three per cent.
It stated that sub-Saharan Africa continued to have the highest average cost (8.2 per cent) adding that supporting the remittance infrastructure and keeping remittances flowing includes efforts to lower fees.
The true size of remittances, which includes formal and informal flows, is believed to be larger than officially reported data, though the extent of the impact of COVID-19 on informal flows is unclear.
“As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.
“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants,” he said.