Nigeria’s remittance inflows jumps in 2022, hits over $20bn

Nigeria’s remittance inflows in 2022 shadows other Sub-Saharan African countries, netting a whopping $20.9 billion from Nigerians abroad sending money home to their families and friends.

Recall that the Central Bank of Nigeria (CBN) had in March 2021 introduced the ‘Naira 4 Dollar Scheme’ which entailed the payment of N5 for every $1 received as a remittance inflow.

According to the World Bank in its latest Migration and Development Brief published on its website, remittance flows to Nigeria increased by 7.5 per cent when compared to the previous year.

In the report, Nigeria remains the largest recipient of remittance in Sub-Saharan Africa, leading Ghana which received $4.7 billion, Kenya got $4.1 billion and Senegal with $2.7 billion. In the whole of Africa, Nigeria came second behind Egypt which received $32.3 billion.

Nigeria, which witnessed a sharp recovery in flows during 2021 (13.2 percent), maintained the improved momentum of 2021 into the first quarter of 2022. However, growth fell in Q2 data to 0.5 percent vis-à-vis the same period of 2021.

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Moreover, the country is reaping little benefit from the surge in crude oil prices, while the expatriate community faces real income losses in the United States, the United Kingdom, and the Euro Area.

Financial flows to Africa have been exceptionally volatile over the longer term and continuing into the 2020s, particularly for foreign direct investment (FDI) and portfolio flows.

Remittances are expected to constitute 38 percent of total flows in 2022, with official development assistance (ODA) standing at 53 percent.

Remittance flows to Africa have maintained secular growth of a favorable 12.5 percent over 2000–22, contrasted with 7 percent gains for FDI, and 8 percent for ODA.

Subject to less volatility than other sources of foreign inflows, remittance receipts have offered a degree of support for overall financial flows.

The largest recipients of remittances in the region during 2022—measured in US dollar terms—include Nigeria, Ghana, Kenya, and Senegal.

Those countries more dependent on receipts as a proportion to GDP include the Gambia, Lesotho, Comoros, and Cape Verde.

Relative rankings of the top 10 recipients have changed little in recent years, though the Gambia has moved up in the remittances GDP group given the dramatic political-economy changes there in recent years.

Notably, Ghana receives the second-largest remittance inflow in dollar terms and the ninth-largest level in relation to GDP.

Sub-Saharan Africa remains the most expensive region to send money to. Senders had to pay 7.8 percent to send $200 to African countries during the second quarter of 2022.