Business
Remittance flows to LMICs to decline by over 14% in 2021 – KNOMAD report
KNOMAD Report reveals that remittances to the low and middle-income countries (LMICs) would decline by over 14% by the end of 2021.
The remittance flows to low and middle-income countries (LMICs) is expected to decline by over 14% by the end of 2021, only slightly lower than the 15% decline projected in April 2020, a trajectory of more gradual but prolonged decline continuing into 2021.
This was revealed in the report recently released by Global Knowledge Partnership on Migration and Development (KNOMAD), captioned “Phase II: COVID-19 Crisis through a Migration Lens – Migration and Development Brief 33 October 2020.”
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The Global Knowledge Partnership on Migration and Development (KNOMAD) is a global hub of knowledge and policy expertise on migration and development, managed by a multi-donor trust fund established by the World Bank alongside other contributors.
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According to the report…
- The decline is based on the trajectory of economic activities in many major migrant-hosting countries, especially the United States, European countries, and the GCC countries. Remittance flows to low and middle income countries (LMICs), which are expected to register a decline of 7.2percent to $508 billion in 2020, followed by a further decline of 7.5 percent to $470 billion in 2021.
- The projected decline in remittances will be the steepest in recent history, certainly steeper than the decline (less than 5 percent) recorded during the global recession of 2009.
- Remittance flows to LMICs touched a record high of $548 billion in 2019, larger than foreign direct investment (FDI) flows ($534 billion) and overseas development assistance (ODA) around $166 billion. The gap between remittances and FDI is expected to widen further as the decline in FDI is expected to be sharper.
- Indeed, both new greenfield investment project announcements and cross-border mergers and acquisitions declined by more than 50 percent in the first months of 2020 from a year before.
- FDI flows to developing countries have steadily declined since 2013 (with the exception of 2018), and they could remain below pre-pandemic levels through 2021.
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What you should know
- The Organization for Economic Co-operation and Development (OECD) lists countries into LMICs and revises it every three years.
- 109 countries are classified as LMICs across the world and all the countries in Sub-Saharan Africa are included in the list.
- Remittance inflows are being considered a major source of external financing for most LMICs.
- The top remittance recipient countries have been India, China, Mexico, the Philippines, and Egypt since 2019.
- Tonga, Haiti, Lebanon, South Sudan, and Tajikistan are the top five recipients in 2020 based on remittances as a share of GDP.
- Weak economic growth and uncertainties around jobs in several high-income migrant-hosting countries such as the United States and European countries are likely to drive low remittances
- The weak oil price affected the remittance flows as most economies such as Asia, Southeast Asia, and Central Asia depend solely on oil price.
- A more structural factor in the case of Saudi Arabia and other GCC countries is a shift in their employment policies to favor the employment of native-born workers.
- Outward remittance flow from the GCC countries is very unlikely to increase significantly, in the medium term, as they implement their employment policies that would favour the employment of the native-born workers.
- A major factor that could affect the flow of remittances is the exchange rate (vis-à-vis the US dollar) of source currencies for most remittances – the weakening of the euro and other currencies against the US dollar will also reduce remittances originating from Europe and other high-income, migrant-hosting countries.
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Why this matters
Remittance inflows have become one of the sources of foreign exchange earnings in LMICs.
Expats transfer money to their home countries to help their loved ones with essential day-to-day needs such as food, school fees, accommodation and medical expenses.
READ: FCMB Group Plc projects PBT of N4.2 billion for Q1 2021
Importantly, many developing countries rely heavily on these inward flows because they make up a significant portion of their foreign-exchange earnings and stimulate domestic consumption, which then boosts their GDPs.
Business
NIMC says it has licensed telecommunication companies to provide NIN
The NIMC has said the agency has licensed telecommunications companies to register applicants who do not have NIN.
The Nigerian Identity Management Commission (NIMC) has said the agency has licensed telecommunications companies to register applicants who do not have National Identity Numbers (NIN).
This measure is to help reduce the large crowd that besieges NIMC offices across the country for registration with the risk of contracting the Covid-19 disease.
According to a report from Punch, this disclosure was made by the Director-General, NIMC, Aliyu Aziz, while responding to an inquiry with respect to measures taken by NIMC to address the complaints made by citizens and the crowds at the commission’s offices.
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Aziz pointed out that mobile network operators had been empowered to also give identity numbers. This is in addition to the licensing of the private and public organization by the commission to provide NIN.
The NIMC boss said, “We have licensed private and public sector organisations including telcos (telecommunications companies) so as to create more centres.’’
READ: Beware of fake NIN app, NIMC warns Nigerians
What you should know
- It can be recalled that the Federal Government had directed that telecommunication companies should block from their network, any SIM that is not registered with valid NINs with effect from December 30, 2020.
- However, following public outcry, the government gave 6 weeks extension to subscribers without NIN from December 30, 2020, to February 9, 2021, and 3 weeks extension for subscribers with NIN from December 30, 2020, to January 19, 2020.
- However, many Nigerians and organisations had called for a further deadline extension or outright suspension of the NIN registration process due to the large crowds who had yet to have their NINs.
Business
CBN disburses N106.96 billion to 27,956 AGSMEIS beneficiaries
The CBN has disbursed a total of N106.96 billion to 27,956 beneficiaries of AGSMEIS.
Business
President Buhari approves local production of helicopters by NASENI
President Buhari has directed NASENI, to collaborate with Dynali Company for the local production of helicopters.
President Muhammadu Buhari has directed the National Agency for Science and Engineering Infrastructure (NASENI), to collaborate with Dynali Company, a Belgian Helicopter Manufacturing Company, for the local production of helicopters.
According to a report from the News Agency of Nigeria (NAN), this directive was given by the President at the maiden edition of the meeting of the Governing Board of NASENI at the State House, Abuja, on Tuesday, January 26, 2021.
While presiding over the meeting, President Buhari, who is also the Chairman of NASENI, directed the agency to work towards bridging the gaps in research and technology that keeps Nigeria waiting on other countries for supplies and solutions, especially in tackling challenges like the Covid-19 pandemic.
What President Buhari is saying
Buhari said the agency should play a more pivotal role in equipping the country during emergencies, while encouraging research, upgrading local skills, fabrication and international collaborations that would provoke growth in science and technology.
The President said, “The uniqueness of the mandate of NASENI as enshrined in its enabling law towards the actualisation and realisation of our development programmes such as the creation of Ten Million jobs; Economic Recovery and Growth Programme (ERGP) and Post COVID-19 sustainability Plan.
“It is only deliberate deployment of Engineering, Science, Technology and Innovation (ESTI) using technology domestication and reverse engineering of capital goods.
“Making them available in Nigeria that can fast-track the realisation of our collective will to build capacity and reduce poverty among our teeming populace. The countries that are at the forefront of economic recovery have only one thing in common: investment and sustained research and development work in knowledge economy.
“Covid-19 pandemic has exposed the Technology and innovation gap between us and the developed World, which NASENI is strategically positioned to fill.’’
Going further, the President said in order to achieve its full potential, NASENI must be empowered through the provision of adequate financial, human and material resources and be given the autonomy and independence to engage in international partnerships to acquire the relevant technologies for socio-economic and industrial advancement of the country.
He said, ‘’In this regard, I have directed the Honourable Minister of Finance, Budget and National Planning and Federal Inland Revenue Service to commence remittance of funds approved by Law of the Agency.’’
‘’It is important to for members of the NASENI Governing Board to note that Agencies of Governments with a similar mandate as NASENI in many countries are directly under the supervision of their respective Heads of State and Government.’’
While making his own remark, the Executive Vice Chairman of NASENI, Prof. Mohammed Haruna, revealed that the agency had constructed electronic voting systems and was already working on locally produced jet engines and assemblage of passenger and military helicopters.
What you should know
- It can be recalled that President Buhari had earlier approved the reconstitution and inauguration of the Governing Board of NASENI on March 8, 2018, with a clear mandate to develop local capacity in machine building and fabrication, which would be critical to Nigeria’s industrial development.
- NASENI was established in 1992 by the Federal Government following the recommendations of the White Paper Committee on the 1991 Report of a 150-member National Committee on Engineering Infrastructure comprising scientists, engineers, administrators, federal and state civil servants, economists, lawyers, bankers and industrialists.
