Nigeria’s diaspora inflows top $29bn on higher prices, bank channels – WB

BY GRACE AIRHULE

The World Bank Group has said that Nigeria’s Diaspora inflow will witness an increase to $29 billion in 2022 as a result of the continued adoption of official bank channels for the facilitation of remittance inflow and higher food prices in the country.

The global bank, in a briefing paper titled, ‘Migration and Development for May 2022: A War in a pandemic: Implication of Ukraine crisis and COVID-19 on the global governance of migration and remittance flow’, said the flow of diaspora remittances to low and middle-income economies is expected to rise 4.2 percent to $630 billion this year.

It noted that migrants in foreign countries are likely to send in more money to their home countries which will drive the hike in the prices of staples.

“In 2022, remittance inflows are projected to grow by 7.1 percent driven by the continued shift to the use of official channels in Nigeria and higher food prices – migrants will likely send more money to home countries that are now suffering extraordinary increases in prices of staples.”

For sub-Saharan Africa, it said the weighted downside risk still remains and there are several factors that support the view for a continued — though more moderate — 7.1 percent gain in inflows to the region in 2022. The bank also noted that in 2021, remittance inflow was $49 billion with Nigeria contributing $19.2 billion to this amount.

“Momentum for the use of official channels in Nigeria should sustain an uptrend in the year, with inflows reaching $21 billion. Though economic activity is likely to ease in the United States and Europe, fundamentals remain positive for continued gains in remittance flows to the remainder of Africa, as the influence of ‘altruistic’ motivations that were demonstrated in Africa and South Asia during the peak pandemic years will likely carry over to the period of sharp increases in staple food prices.”

The World Bank also said the use of informal channels to transfer money to the SSA region caused a 28 percent reduction in inflows in 2020. Meanwhile, its comments on the Naira4Dollar policy by the CBN last year, which was an attempt to drive an improved remittance flow through formal channels, helped to bolster inflows in 2021 by 11.2 percent.