A new report by leading global payments company, WorldRemit has indicated that the Philippines, Nigeria and Ghana are the world’s leading destinations for diaspora remittances across the globe. According to it, this trend is likely to continue as these countries continue to recover rapidly from the COVID-19 pandemic.
According to WorldRemit, the study included responses from more than 3,000 of its customers across the world. The results paint a striking picture of the importance of remittances to the loved ones of immigrants.
These include growing migrants to the USA, the UK and Canada, as the world adjusts to a new way of living due to COVID-19.
The report indicates that the countries with the highest volume of remittances according to respondents were the Philippines (18%), Nigeria (11.5%), Ghana (10.5%). Also, 1.68% of respondents indicated that they sent money abroad at least once every month and 28% of respondents indicated that t they send money multiple times a year.
The report shows that the pandemic has had a significant effect on the amounts of money sent to their loved ones back home and particularly on the key reasons people sent the money abroad in the first place. The most common were daily expenses, gifts, medical expenses and education. See a breakdown below:
- 44% cited that the amount they send for medical expenses has increased.
- 41% cited that the amount they send for daily expenses has increased.
- 38% cited that the amount they send for utilities increased.
- 35% cited that the amount they send for education increased.
Diaspora remittances and growing economies
For many growing economies, diaspora remittances form a significant bulk of the GDP. Hence, a growth- however slight- in the rate has an instant effect on the people and their spending capacity.
According to World Bank data, global remittances increased by 10% in 2018 to $689 billion from $633 billion in 2017, with poor countries receiving 77% of total inflows, or $528 billion.
The report by WorldRemit indicates that the nations with the top inflows have all seen significant GDP growth – 4.5% in the Philippines, 1.5% in Nigeria and 5.1% in Ghana.
Overall, remittances to developing countries increased by 4.9 per cent in 2019 to $554 billion. Nigeria and 47 other Sub-Saharan African countries increased their trade by 4.3 per cent to $48 billion in 2019, up from $46 billion in 2018.
Nigeria’s National Bureau of Statistics (NBS) estimates that six out of every 100 Nigerian households get remittances from abroad. These families get an average of N84,741 in diaspora remittances, with 80% of the money going toward basic needs.
The expansion in Nigerian diaspora remittances may have been fueled by the Central Bank of Nigeria’s (CBN) series of foreign exchange reforms, which included the licensing of an extra 65 International Money Transfer Operators (IMTOs) in 2016.
These cash in-flows “assist poorer receivers to meet basic requirements, fund cash and non-cash investments, pay education, promote new businesses, service debt, and ultimately, fuel economic growth,” according to research by PWC Nigeria.
According to the World Bank, Nigeria received more remittances from the diaspora in 2015 than it did from oil, which accounts for over 50% of government revenue and 80% of Nigeria’s foreign exchange revenues.
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