Nigerians In Diaspora Spent $2.94bn To Send $34.8bn – Report
Nigerians in Diaspora spent $2.94bn to send $34.8bn to Nigerian between 2020 and 2021, World Bank reports have revealed.
The reports showed that cost of sending remittance costs into Nigeria hit at least N1.22tn ($2.94bn) in the last two years.
This is according to the World Bank estimate for remittance cost into Sub-Saharan Africa.
According to the global bank in its recently released report, ‘Recovery COVID-19 Crisis Through a Migration Lens: Migration and Development Brief 35,’ remittance into SSA is the highest globally.
The World Bank said, “Sub-Saharan Africa remains the costliest region to send remittances to: costs averaged 8 per cent during Q1 2021, down from 8.9 per cent from Q1 2020.”
Nigeria accounts for 50 per cent of remittances into the SSA region. In 2020, remittance into Nigeria was $17.2bn, and in 2021, the World Bank disclosed that remittance would hit $17.6bn.
The World Bank disclosed that for every $200 sent in 2020, it cost the sender $17.8 (8.9 per cent). In 2021, the figure reduced to $16 (8 per cent). This means that it cost the Nigerians in Diaspora at least $1.53bn to remit $17.2bn in 2020.
In 2021, it will cost Nigerians in the Diaspora at least $1.41bn to remit $17.6bn. Remittance cost in the SSA region was 2.1 per cent above the global average of 6.8 per cent in 2020, and is 1.6 per cent above the global average of 6.4 per cent in 2021.
The global bank said, “The cost of sending money across international borders continued to remain high, around 6.4 per cent on average in Q1 2021, or more than double the SDG target of 3 per cent.
“The cost of remittances to Sub-Saharan Africa remained particularly high (above eight per cent). Corridor-specific data (reported in the regional sections) reveal that remittance costs tend to be higher when remittances are sent through banks than through digital channels or through money transmitters offering cash-to-cash services.”
According to the World Bank, the pandemic caused a shift from handling cash to using digital payment channels. The bank said, “Hand carrying of both cash and in-kind remittances (i.e., goods instead of money) across national borders was affected by travel restrictions, increasing the importance of digital transfers.”
The bank added that international remittances sent and received via mobile devices reached $12.7bn in 2020 (up 65 per cent compared to 2019), and about 80 per cent of the amount was remitted to Sub-Saharan Africa.
The bank said, “However, this amount is a small fraction of the total volume of remittances, implying that there is great potential for this channel to grow among the 5.2 billion mobile phone users in the world. Mobile remittances tend to be cheaper, allowing smaller, more frequent, remittance transactions.”