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Overall, the top recipients of migrant remittances among all developing countries last year, according to the report, were India ($52 billion); China ($40.6 billion); Mexico ($26.3 billion); the Philippines ($18.6 billion); Poland ($10.7 billion); Nigeria ($10 billion); Egypt ($9.6 billion); Romania ($9.4 billion); Bangladesh ($9.0 billion); and Vietnam ($7.2 billion).
According to Dilip Ratha, co-author of the report: “Remittances provide a lifeline to many poor countries,” he said. “Although they remain resilient, even a small decline of seven per cent or 10 per cent can pose significant hardships to the people and to governments, especially those facing external financing gaps.”
Meanwhile, Nigerian financial experts have also said that the dwindling remittances from Nigerians abroad might lead to exchange rate volatility, naira depreciation and further compound the nation’s economic woes. The experts spoke with the Nigerian Tribune in Lagos.
According to an economist and member, Federal Government Economic Crisis Management Team, Dr. Doyin Salami, funds from Nigerians abroad in the past years contributed immensely to the boom in the capital market with multiplier effects on other sectors, stressing that the decline was a manifestation of the effects the global economic crisis were having on the country.
He noted that a majority of Nigerians abroad had lost jobs due to the effects of the global economic meltdown, stating that except there was a quick recovery, the nation’s economic fundamentals would be altered.
Also speaking, a financial analyst, Mr. Oludare Kolawole, linked the decline to the crunching effects of the global economic crisis, adding that it had led to the reduction of inflow of funds from abroad into the system .
He observed that the reduced diaspora remittances would further lead to exchange rate volatility and cause the naira to further depreciate.
According to Kolawole, the individual families that had been beneficiaries of the foreign currencies would also be affected, stating that developing countries, particularly Nigeria and India, would be worst hit since they relied heavily on remittances from abroad.
Speaking in the same vein, an analyst and Chief Operating Officer, Landmark Investments, Mr. Okechukwu Amadi, stated that diaspora remittances were largely responsible for the boom in the capital market and estate sub-sector, stressing that the decline would lead to multiplier effects on both individuals and the economy.
He observed that both individuals and the country were facing hard times because of the decline.
The decline is expected to bottom out next year, however. Remittances should begin a gradual rebound in 2010, reaching $313 billion worldwide by the end of the year, or three per cent greater than the $304 billion that is currently estimated for 2009.
Such a rebound, however, could be threatened if the ongoing economic crisis proves deeper and longer than currently projected, or if the currencies of host countries should unexpectedly decline in value.
Moreover, the political reaction to unemployment in host countries could result in measures to tighten immigration, making it more difficult for migrants to enter host countries in search of work or for those who are already residents there to find employers willing to hire or retain them.
Hard times await Nigerians, banks, - Nigerians abroad sent home N1.5 trillion in 2008 - World Bank
Odidison Omankhanlen,
Lagos
THE World Bank has alerted that the amount of money being sent to Nigerians by their family members based abroad is expected to reduce in 2009 by about 10 per cent.
Nigeria made $10 billion from remittances made by its citizens living abroad in 2008.
According to the World Bank, poor countries in Europe and Central Asia and sub-Saharan Africa, and Latin America and the Caribbean would be hardest hit, according to the report, which was released during the opening session of a two-day International Conference on Diaspora and Development at the bank’s headquarters.
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