The World Bank’s latest report has shown that Nigeria had the highest remittance flow into Sub-Saharan Africa in 2022, as the continent recorded an estimated $52.9 billion.
The report, tagged, ‘Remittances Remain Resilient But Are Slowing, covering 2022, showed that Nigeria accounted for $20.1 billion, which represents 38 per cent of the total remittance flow.
This is higher than that of Ghana (11.9 per cent), Kenya (8.5 per cent), Tanzania (25 per cent), Uganda (17.3 per cent) and Rwanda (21.2 per cent).
“The increase in remittance flows to the region supported the current accounts of several African countries dealing with food insecurity, supply chain disruptions, severe drought (Horn of Africa), floods (in Nigeria, Chad, Niger, Burkina Faso, Mali, and Cameroon), and debt-servicing difficulties,” the report said.
Commenting on the importance of remittance flows, the World Bank said: “Over the past year, remittances have continued to represent an even larger source of external finance for LMICs, relative to foreign direct investment (FDI), official development assistance (ODA), and portfolio investment flows. The importance of remittances as a premier source of external finance for LMICs is more apparent when China is excluded from the sample.”
In addition, the World Bank said Sub-Saharan Africa remains the region with the highest remittance costs. Highlighting how costly remittance is on the continent, the report said: “Senders had to pay an average of 8.0 per cent to send $200 to African countries during 2022Q4, compared with 7.8 per cent in 2021Q4. Costs vary substantially across the region, ranging from 2.1–4.0 per cent in the lowest cost corridors to 17–35 per cent in the highest.
“For example, sending $200 in remittances from Tanzania to neighbouring Uganda would have cost a migrant 35.5 per cent in 2022Q4. Banks charge the highest costs, thus emphasising the importance of cross-border mobile money transactions. In Kenya, Rwanda, Tanzania, and Uganda, such transactions are constrained by limited interoperability among telecom operators and money transfer operators,” it added.
