Nigerians Not Sending Money Home, Remittances Drops 10%

Nigerians Not Sending Money Home, Remittances Drops 10%

Racheal Ishaya: Remittances to Nigeria and developing countries fell for a second consecutive year in 2016, a trend not seen in three decades, says the latest edition of the Migration and Development Brief. Remittances to Nigeria, according to the report, went down by 10 percent in 2016; Bangladesh 11.1 percent, and Egypt, 9.5 percent.

The report was released on Friday by the World Bank, at the ongoing IMF/ World Bank’s Spring Meetings in Washington DC, U.S.

The report showed that many large remittance-receiving countries saw sharp declines in remittance flows.

Remittances to Nigeria, according to the report, went down by 10 percent in 2016; Bangladesh 11.1 percent, and Egypt, 9.5 percent.

“The diversion of remittances to informal channels due to controlled exchange rate regimes in countries such as Nigeria contributed to declining in the region.

IMF Explanations For the Decline

“Remittance flows to Sub-Saharan Africa declined by an estimated 6.1 percent to 33 billion dollars 2016, due to slow economic growth in remittance-sending countries; decline in commodity prices, especially oil, which impacted remittance receiving countries.

“The diversion of remittances to informal channels due to controlled exchange rate regimes in countries such as Nigeria contributed to declining in the region.

“However, remittances to the region are projected to increase by 3.3 percent to
34 billion dollars in 2017,” it said.

The report showed, however, that Mexico and the Philippines were the only exceptions, which saw inflows increase by an estimated 8.8 per cent and 4.9 per cent last year.

The Bank estimates that officially recorded remittances to developing countries amounted to 429 billion dollars in 2016, a decline of 2.4 percent, from over 440 billion dollars in 2015.

Global remittances which include flows to high-income countries, also contracted by 1.2 per cent to 575 billion dollars in 2016, from 582 billion dollars in 2015.

“Low oil prices and weak economic growth in the Gulf Cooperation Council countries and the Russian Federation are taking a toll on remittance flows to South Asia and Central Asia.

“Also, weak growth in Europe has reduced flows to North Africa and Sub-Saharan Africa,” the report stated.

According to the report, the decline in remittances, when valued in U.S. dollars, was made worse by a weaker Euro, British pound and Russian ruble against the U.S. dollar.

The acting Director of the World Bank’s Global Indicators Group, Ms Rita Ramalho, said that the decline in remittances could affect the livelihood of many families.

“Remittances are an important source of income for millions of families in developing countries.

“As such, a weakening of remittance flows can have a serious impact on the ability of families to get health care, education or proper nutrition,” she said.

Ramalho said that with an improved global economic outlook, remittances to developing countries were expected to recover in 2017, growing by an estimated 3.3 percent, which is about 444 billion dollars in 2017.

The world bank report also gave statistics on current global migration.

Between 2015 and 2016, the number of refugees in the 28 European Union countries was said to have increased by 273,000 to 1.6 million.

During the same period, the number of refugees worldwide increased by 1.4 million, to 16.5 million.

The report called for regional and bilateral agreements to address migration, develop normative guidelines for governments and international organisations.

Mr Dilip Ratha, Head of the World Bank Global Knowledge Partnership on Migration and Development, said migration would continue to be on the increase due to large income gaps, widespread youth unemployment, ageing populations in many developed countries.

He said that climate change, fragility and conflict would continue to affect migration, going forward.

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