By Tony Obiechina, Abuja
Despite COVID-19, remittance flows remained resilient in 2020, registering a smaller decline than previously projected.
Officially recorded remittance flows to low- and middle-income countries reached $540bn in 2020, just 1.6 per cent below the 2019 total of $548 billion, according to the latest Migration and Development Brief by the World Bank.
The decline in recorded remittance flows in 2020 was smaller than during the 2009 global financial crisis which stood at 4.8 percent).
It was also far lower than the fall in Foreign Direct Investment flows to low and middle-income countries, which, excluding flows to China, fell by over 30 percent in 2020.
As a result, remittance flows to low- and middle-income countries surpassed the sum of FDI ($259bn) and overseas development assistance ($179bn) in 2020.
The main drivers for the steady flow included fiscal stimulus that resulted in better-than-expected economic conditions in host countries, a shift in flows from cash to digital and from informal to formal channels, and cyclical movements in oil prices and currency exchange rates.
The true size of remittances, which include formal and informal flows, is believed to be larger than officially reported data, though the extent of the impact of COVID-19 on informal flows is unclear.
The Central Bank of Nigeria (CBN), had in recent times been taking steps to boost remittances inflow from Nigerians in the Diaspora.
Just two months ago, the apex bank introduced a N5 incentive for every dollar remitted into the country by Nigerians in the Diaspora.