Forex Scarcity May Worsen as Economic Hardship Force Nigerians Abroad to Stop Sending Dollars Home
- The current dollar scarcity in Nigeria may continue as Nigerians living abroad may stop sending money home due to economic crisis in their host countries
- Nigerians abroad are facing an economic crunch as the economies of their host countries face downturns
- People living in the UK and the US complain of high inflation, which has affected their income levels
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Remittances to Sub-Saharan Africa are at risk due to the economic crisis in the United Kingdom and the United States.
According to BusinessDay, the World Bank had projected in its migration report that remittances into Africa would increase by 7 percent in 2022.
Source: Getty Images
High inflation threatens dollar remittances
Dilip Ratha, head of Global Knowledge and Partnership on Migration and Development at World Bank, stated that the institution said uncertainty and risks in the outlook for remittances to the continent are very high against global conditions affected by the Russian invasion of Ukraine and the effects of the COVID-19 pandemic.
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Immigrants abroad are experiencing worsening external conditions such as the threatening recession with inflation rates high in most countries, with the US seeing as much as 9.4 percent and 8.5 percent for the UK, respectively.
Inflation in those countries has caused a surge in the prices of goods and services, tighter monetary policies, supply chain problems caused by the Russia-Ukraine war, and the impact of the COVID-19 pandemic.
Nigerian abroad complain
Makua, a Nigerian living in the UK, said the high inflation rate and high cost of living are currently rocking the country.
He said residents could only give the little they have.
BusinessDay quoted another Nigerian, Rotimi Johnson, in the UK, saying the people in the UK are more in need of money.
Johnson said they could save 2,000 pounds monthly if they earned 5,000, but they can barely send 1,000 pounds because of the high price of goods and services.
Billions of dollars sent home
Diaspora remittances into Africa and Nigeria hit $49 billion in 2021 and $19.2 billion in Nigeria, with a projected increase of 7 percent.
The World Bank report said that remittances to Africa could hit $51 billion by the end of 2022. But this projection is being threatened by an economic crunch.
The US Labour Statistics reports that the US unemployment rate was at 3.5 percent in July 2022, which is a slide to the pre-pandemic level.
The UK saw a 3.7 percent unemployment rate in June at 0.2 percent and a point lower than pre-pandemic levels, according to the Office of National Statistics. It has, however, risen this week to 3.8 percent.
Latest record shows 10 African countries with highest diaspora remittances
Legit.ng reported that World Bank said that in 2022, the remittance view is moderately positive, according to Business Insider. The bank released its Migration and Development Brief, saying that growth is expected to continue at 7.0 per cent to $55 billion.
The growth, World Bank said, is despite the general adverse economic environment globally.
Remittances all over the world have always been a much-needed help for low-income countries like Nigeria, most of which are African countries.
Source: Legit.ng
