By Adedapo Adesanya
Nigeria emerged as a prominent beneficiary of diaspora remittances in Sub-Saharan Africa, accounting for over 35 per cent of total inflows in 2023, totalling nearly $19.5 billion.
This is according to a World Bank analysis that examines global remittances in 2023 and forecasts inflows for 2024.
The survey stated that Nigeria received the greatest influx in the area last year but recorded a drop of 2.9 per cent to $20.5 billion in 2022.
“Remittances to Nigeria, accounting for around 35% of total remittance inflows to the region, decreased by 2.9% to $19.5 billion,” the report said.
Ghana and Kenya are also significant recipients of remittances, with inflows of $4.6 billion and $4.2 billion, respectively.
“The regional growth In remittances in 2023 was largely driven by strong remittance growth in Uganda (15% to $1.4 billion), Rwanda (9.3% to $0.5 billion), Kenya (2.6% to $4.2 billion), and Tanzania (4% to $0.7 billion),” the report noted.
Sudan and South Africa, which together receive $1 billion in remittances, are at the bottom of the list of the ten countries with the highest inflows.
The report also shows that remittances from the diaspora account for one-fifth of the GDP in countries like Gambia, Lesotho, Comoros, Liberia, and Cape Verde, all of which heavily rely on these inflows for their economic development.
The report also shows that these remittances came mainly from countries such as the United States and Canada as well as from the United Kingdom, Switzerland, and Italy.
It is also important to note that Sub-Saharan Africa has the highest remittance cost with an average of 7.9 per cent compared to other regions.
These remittance costs include payments such as bank charges, money transfer operator’s percentage as well as stamp duties, among others.
Even with the massive influx of foreign cash brought in by Nigerians abroad, the nation continues to face severe liquidity issues in its foreign exchange market.
However, recent policy thrusts from the Central Bank of Nigeria (CBN), have created a structure that will let the inflows from diaspora be recognised in the official foreign exchange market, which might help reduce the currency volatility that has led to the naira’s decline.
Recall the Governor of the CBN, Mr Yemi Cardoso, said the country recorded a total foreign exchange inflow of about $24 billion in the first quarter of 2024.
“In terms of liquidity, especially on the foreign exchange side, we have seen an increase. The first quarter of this year has resulted in a total inflow of about $24bn. Now, this is almost about 40 to 50 per cent more than the quarters up to about 2021,” he said.
Modupe Gbadeyanka