Though smaller than previously projected, registering a dip, remittance flows remained resilient in 2020 despite COVID-19, with $540bn on record just 1.6 percent below the 2020 total of $548bn.
Officially recorded remittance flows to low-and middle-income countries reached $540bn in 2020, just 1.6 percent below the 2019 total of $540bn, 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 excluded flows to China, fell by over 30 percent in 2020.
As a result, remittance flows to low-and middle-income counties 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 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.
Looking for a boost to remittance flow the Central Bank of Nigeria, recently announced measures to inflate inflows from Nigerians in diaspora. In the line of that the CBN introduced a N5 incentive for every dollar remitted into the country by Nigerians in the diaspora.