Diaspora remittances to Nigeria stood at $24.3 billion last year. It was the highest remittance to any country in sub-Saharan Africa and an increase of more than $2 billion compared to previous year’s figure of $22.3 billion.
According to World Bank’s latest “Migration and Development Brief”, immigrants sent $46 billion to their home countries in sub-Saharan Africa last year, a 10 per cent jump in remittances in 2017.
The growth in remittances was supported by strong economic conditions in high-income economies, World Bank said.
Remittances to sub-Saharan African countries last year contributed significantly to Gross Domestic Product (GDP) of these nations.
Looking at remittances as a share of the GDP, Comoros had the largest share, followed by the Gambia, Lesotho, Cape Verde, Liberia, Zimbabwe, Senegal, Togo, Ghana, and Nigeria, according to the Brief.
Remittances to Middle East and North Africa grew nine per cent to $62 billion in 2018. The growth was driven by Egypt’s rapid remittance growth of around 17 per cent.
The Brief said: “Beyond 2018, the growth of remittances to the region is expected to continue, albeit at a slower pace of around three per cent in 2019 due to moderating growth in the Euro Area.”
Remittances to low and middle-income countries also reached a record high last year. The bank estimates that officially recorded annual remittance flows to low- and middle-income countries reached $529 billion last year, an increase of 9.6 per cent over the previous record high of $483 billion in 2017.
Global remittances, which include flows to high-income countries, reached $689 billion last year, up from $633 billion the year before.
Such funds have become one of the most important external sources of finance for Africa over the years. Recent surveys state that most of the money migrant workers send home to sub-Saharan Africa is spent on education, health care, land, building houses, starting a business or improving farms.
Research by Adams Bodomo of University of Vienna argues that Diaspora remittance funds constitute a better alternative to Overseas Development Assistance (ODA) funds for the development of Africa for a number of reasons.
He said: “The funds are less likely to be misspent as compared to the misappropriations and legendary inefficiencies in the foreign aid industry. Diaspora remittance funds, as gifts of love, are better focused on building the family and hence the nation.
“The distribution of these Diaspora remittance funds is far more efficient than ODA funds since these monies go directly to paying school fees, building houses, and growing businesses.”
As remittances make up a significant share of gross domestic product in African countries, they help boost the economies of the respective countries.