Nigeria’s Dollar Remittances Surge to $21bn in Post-Pandemic….


The latest data from the World Bank on remittances indicates a notable surge in inflows into Nigeria during the post- COVID-19 years.

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Following a decline to $17 billion in 2020 from the previous year’s $24 billion, remittances are estimated to have grown by over 19%, reaching $21 billion in 2023.

This robust recovery is attributed to factors such as the ec onomic resurgence in sending countries and the implementation of digital payment solutions, facilitating swifter and more cost- effective transfers.

In 2023, remittance flows to low-and middle-income countries(LMICs) are estimated to have
reached $669 billion as resilient labour markets in advanced economies and Gulf Cooperation
Council (GCC) countries continue supporting migrants’ ability to send money home.

Thus, flows to the LIMCs grew at estimated
3.8% in 2023, a moderation from the high gains of the previous two years.

Of concern is the risk of decline in real income for migrants in 2024 in the face of global inflation and low growth prospects.

Nigeria is among the key remittance destinations in sub-Saharan Africa, with remittance receipts amounting to $24 billion in 2019 and $21 billion in 2023.

Nigeria maintains its lead as a major recipient, accounting for 38% of total remittances inflows into the sub-Saharan African region in 2023 on the back of strong remittance growth.

These inflows play a crucial role in Nigeria’s economy, contributing significantly to household income, poverty reduction, and investment in education and healthcare.

According to the World Bank report, Nigeria recorded a moderate rebound in remittance inflow by 2% from $20 billion in 2022 to $21 billion in 2023, and was trailed by the likes of Ghana and Kenya, as major recipients, which posted estimated gains of 5.6% and 3.8%, respectively.

The report highlighted that in the last decade, 2018 was the peak period for foreign currencies inflows into the country from Nigerians in the diaspora while a total inflow of $24.31 billion was received into the country from diaspora but declined to $23.809 billion in 2019, $17.208 billion in 2020 amidst pandemic induced pressures.

Remittances generally sustained upward trajectory between 2014 and 2021, with annual increases ranging from 5.9% to 14.7.

However, there have been significant fluctuations in remittance inflows, with the biggest drops occurring in 2016 and 2020, likely due to economic downturns in both Nigeria and major sending countries.

Meanwhile, the last two years (2021 and 2022) have seen a strong rebound in remittance inflows, majorly propelled by factors such as economic recovery in sending countries and the implementation of digital payment solutions facilitating faster and more cost-effective transfers.

Looking ahead, to 2024, the World Bank anticipates that a significant increase by 2.5% is expected in terms of remittance flows to the sub-Saharan Africa (SSA) region.

Also, we may likely see an increase of about 1.9% in 2023, reaching $54 billion. This growth is underpinned by strong remittance performance in countries like Mozambique (48.5%), Rwanda (16.8%), and Ethiopia (16%).

However, amidst this optimistic outlook, concerns arise about a potential decline in real income for migrants in 2024.

This apprehension is grounded in global inflation and low growth prospects, posing risks to remittance flows. Furthermore, the trajectory of weaker global economic activity is projected to soften the growth of remittances to LMICs to 3.1% in 2024.

Contributing to this moderated forecast are slowing economic growth and the prospect of weaker job markets in several high-income countries.

Additional downside risks include volatile oil prices, fluctuating currency exchange rates, and the potential for a more pronounced economic downturn in high-income countries.

In our analysis, Cowry Research anticipates that while 2023 is poised for further growth, the rate of remittance inflow is expected to be more gradual compared to the preceding two years.

This deceleration could be attributed to economic uncertainties and rising living costs in both Nigeria and sending countries. The sustained volatility in the global economic and financial landscape could impact remittance flows in the future, necessitating vigilant monitoring and potential policy adjustments.

Gbenga Samson
Gbenga Samson
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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