Nigeria recorded the largest home remittances inflows in subSaharan Africa region, in 2021, after it gained 11.2 percent, in part due to policies intended to channel inflows through the country’s banking system.
This was as inflows to Sub-Saharan Africa soared 14.1 percent to $49 billion in 2021 following an 8.1 percent decline in the prior year. Growth in remittances was supported by strong economic activity in Europe and the United States. Countries registering double-digit growth rates include Cabo Verde (23.3 percent), Gambia (31 percent), and Kenya (20.1 percent). Countries where the value of remittance inflows as a share of GDP is signaificant include the Gambia (27 percent), Lesotho (23 percent), Comoros (19 percent), and Cabo Verde (16 percent). In 2022, remittance inflows are projected to grow by 7.1 percent driven by continued shift to the use of official channels in Nigeria and higher food prices – migrants will likely send more money to home countries that are now suffering extraordinary increases in prices of staples. The cost of sending $200 to the region averaged 7.8 percent in the fourth quarter of 2021, a small decline from 8.2 percent a year ago. The war in Ukraine has also affected the international payment systems with implications for cross-border remittance flows. The exclusion of Russia from SWIFT has added a national security dimension to participation in international payments systems.
“Lowering remittance fees by 2 percentage points would potentially translate to $12 billion of annual savings for international migrants from LMICs, and $400 million for migrants and refugees from Ukraine,” added Ratha. “The cross-border payment systems, however, are likely to become multipolar and less interoperable, slowing progress on reducing remittance fees.”
World Bank Launches International Working Group to Improve Data on Remittances. The COVID-19 pandemic and the war in Ukraine have further highlighted the need for frequent and timely data.