World Bank Says Remittances to Nigeria, Other LMICs Will Drop by 20%

• World Bank has projected remittances to Nigeria, Egypt, Senegal and other low- and middle-income countries (LMICs) to drop sharply by 19.7 percent to $445 billion in 2020 due to the COVID-19 lockdown.

• The reduction in remittances impacts the willingness of families to invest in these areas, more of their resources would be diverted towards addressing food shortages and the needs for immediate living.

• In the meantime, the World Bank assists the Member States in monitoring the flow of remittances across various networks, the cost and convenience of sending money, and the financial integrity regulations that affect remittance flows.

World Bank has predicted remittances to Nigeria, Egypt, Senegal, and other low- and middle-income countries (LMICs) to drop sharply by 19.7 percent to $445 billion in 2020, due to the

COVID-19 pandemic and lockdown economic crisis.

The World Bank Group has described LMICs as low-income ($1,005 or less per capita GNI) or low-middle-income ($1,006 to $3,9555 per capita) economies.

According to the statement released by the global lender and seen by Nairametrics, the decline will be the sharpest decline in recent history and is primarily attributed to a fall in salaries and jobs for migrant workers who are more vulnerable to job losses and salaries in a host country during an economic downturn.

Remittances to LMICs will drop to $445 billion, reflecting a loss to many poor households from a critical funding lifeline. Statistics indicate that remittances mitigate poverty in low- and middle-income nations, boost nutritional outcomes, correlate with higher education spending, and minimize child labour in poor households, according to the World Bank.

A reduction in remittances impacts the willingness of families to invest in these areas because more of their resources would be diverted towards addressing food shortages and the needs for immediate living.

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President, World Bank Group, David Malpass, said:

“Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies.

Remittances help families afford food, healthcare, and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs.”

In the meantime, the World Bank assists Member States in monitoring the flow of remittances across various networks, the cost and convenience of sending money, and the financial integrity regulations that affect remittance flows. This also partners with the G20 countries and the global community to reduce remittance costs and improve poor people’s financial inclusion.