The World Bank has said that as a consequence of the ravaging COVID-19 pandemic, remittances to Nigeria and other low and middle-income countries (LMICs) are projected to fall by 19.7 per cent to $445 billion.
Tribune Online reports that the World Bank made this known in a statement released on Wednesday in Washington.
COVID-19 pandemic has stalled productive activities and resulted in a shutdown of many economies, thus leading to the loss of many jobs.
David Malpass, World Bank Group President, said: “Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies.
“Remittances help families afford food, healthcare, and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs.”
According to the National Bureau of Statistics (NBS), Nigeria got about $96.5billion in remittances between 2013 and 2018, while almost $25bn was remitted in 2019. With the projected decline, remittances from Nigerians living abroad may slide to $20billion from the previous figure of $25billion.
The statement added that the World Bank is assisting its member states to monitoring the flow of remittances through various channels, the costs and convenience of sending money, and regulations to protect financial integrity that affect remittance flows.
According to the statement, “Remittance flows are expected to fall across all World Bank Group regions, most notably in Europe and Central Asia (27.5 per cent), followed by Sub-Saharan Africa (23.1 per cent), South Asia (22.1 per cent), the Middle East and North Africa (19.6 per cent), Latin America and the Caribbean (19.3 per cent), and East Asia and the Pacific (13 per cent).”
The statement noted that the COVID-19-precipitated decline is coming after remittances to LMICs reached a record $554 billion in 2019.
“Even with the decline, remittance flows are expected to become even more important as a source of external financing for LMICs as the fall in foreign direct investment is expected to be larger (more than 35 per cent). In 2019, remittance flows to LMICs became larger than FDI, an important milestone for monitoring resource flows to developing countries,” the statement added.
The World Bank, however, opined that remittances to LMICs would rise by 5.6 per cent to $470 billion in 2021.
“The outlook for remittance remains as uncertain as the impact of COVID-19 on the outlook for global growth and on the measures to restrain the spread of the disease. In the past, remittances have been counter-cyclical, where workers send more money home in times of crisis and hardship back home. This time, however, the pandemic has affected all countries, creating additional uncertainties,” the statement noted.