Nigeria attracts $20.52bn remittance flows in 2023 – World Bank

Nigerian remittance from Diaspora is expected to grow by 2 percent to hit $20.52 billion at the end of the year 2023 as Egypt tops Africa’s remittance destination with $24 billion in 2023.

This is according to the latest Migration and Development Brief report to low- and middle-income countries released by the World Bank which says global remittance to Sub-Saharan-Africa is expected to rise by 1.9 percent to $54 billion in 2023.

A breakdown of the distribution of the $54 billion remittance to the Sub-Saharan African region shows that Mozambique will get 48.4 percent, Nigeria 38 percent, Rwanda 16.8 percent and Ethiopia 16 percent translating to $26.19 billion, $20.52 billion, $9.07 billion and $8.64 billion respectively.

“Remittances to LMICs grew an estimated 3.8 percent in 2023, moderating from the high gains of the previous two years,” the report stated.

But it expressed concern over the risk of decline in real income for migrants in 2024 as the global economy faces inflation and low growth prospects.

“In 2023, remittance flows to 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,” the report added.

On a regional basis, remittance inflows grew for Latin America and the Caribbean by 8 percent, South Asia 7.2 percent, East Asia and the Pacific 3 percent respectively, and Sub-Saharan Africa 1.9 percent.

The report noted that flows to the Middle East and North Africa fell for the second year, declining by 5.3 percent mainly due to a sharp drop in flows to Egypt.

Similarly, remittances to Europe and Central Asia fell by 1.4% after gaining more than 18 percent in 2022, the report explains.

On remittance to Africa, the report said, “Remittance flows to Sub-Saharan Africa are expected to have increased by about 1.9 percent in 2023 to $54 billion, driven by strong remittance growth in Mozambique (48.5 percent), Rwanda (16.8 percent), and Ethiopia (16 percent).

“Remittances to Nigeria, accounting for 38 percent of remittance flows to the region, grew by about 2 percent, while two other major recipients, Ghana and Kenya, posted estimated gains of 5.6 percent and 3.8 percent, respectively.”

The report noted that, “Fixed exchange rates and capital controls are diverting remittances to the region from official to unofficial channels.” Adding that, “In 2024, remittance flows to the region are projected to increase by 2.5 percent.

On the cost of transaction, the report said, “Sending $200 to the region cost 7.9 percent on average in the second quarter of 2023.”

Meanwhile, the United States remained the largest source of remittances.

The top five remittance recipient countries in 2023 are India ($125 billion), Mexico ($67 billion), China ($50 billion), the Philippines ($40 billion), and Egypt ($24 billion).

While economies where remittance inflows represent substantial shares of gross domestic product (GDP) – highlighting the importance of remittances for funding current account and fiscal shortfalls – are Tajikistan (48 percent), Tonga (41 percent), Samoa (32 percent), Lebanon (28 percent), and Nicaragua (27 percent).

Commenting on the report, Dilip Ratha, lead economist and lead author of the report, said “Remittances are one of the few sources of private external finance that are expected to continue to grow in the coming decade. They must be leveraged for private capital mobilization to support development finance, especially via diaspora bonds.

“Remittance flows to developing countries have surpassed the sum of foreign direct investment and official development assistance in recent years, and the gap is increasing.”