Capital inflows to the economy through diaspora remittances from Nigerians living abroad stood at $25 billion in 2019. But the World Bank has predicted 20 per cent dip this year as the impact of Coronavirus pandemic on people’s income weighs in.
World Bank Group President 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. He explained that remittances help families afford food, healthcare, and basic needs.
For him, now is the time to break the monopoly, which puts the remittances market in the hands of few players and deprives others from tapping into the goldmine. For him, there is an urgent need to get more players to join the remittance collection market including getting BDC operators approved for the business.
The ABCON boss also called for the establishment of training institutes to enhance capacity and infrastructure in the industry and broadening players’ business scope with cash-back incentives for those that patronize BDCs while also implementing less cumbersome and complex documentation requirements for end-users.
However, there is a huge differential between the Word Bank statistics and the local sources due to lack of data and operators indulgence in non-reporting and non-rendition practices to the official window. The remittances were 11 times higher than the FDIs in the same period and 7.4 per cent larger than 2017’s $3. 34 billion, the net official development assistance.