SOCIOLOGY 104 CLASS ASSIGNMENT

NAME:ENAKEVWERHE MATTHEW EDORE

MATRIC NO:215894
LEVEL:100
DEPARTMENT:SOCIOLOGY
QUESTION: WHAT IS THE VOLUME OF
REMITTANCES FROM INTERNATIONAL
MIGRANT FROM FIVE AFRICAN COUNTRIES
INCLUDING NIGERIA. WHAT ARE THE
REASONS, SIMILARITIES, DIFFERENCES
BETWEEN THESE COUNTRIES.

Solution

According to the world bank 2019 migration and development brief , $529 billion in remittances
were sent to low and middle income countries in 2018_ an increase of 9.6 % over the previous
record high of $483 billion in 2017. This implies that the volume of remittances sent by
iternational migrants increased.

What is remittances?

A remittance refers to money that is sent or transferred to another party . The term is derived
from the word remit , which means to send back. remittances can be sent via a wire transfer,
electronic payment system , mail draft or check.

Also, remittances can be used for any type of payment including invoices or other obligations
but the term is typically used to refer to money sent to family members back in a person's
home.

According to the IMF, remittances represent household income from foreign economies arising
mainly from the temporary or permanent movement of people to those economies.
Remittances include cash and noncash items that flow through formal channels such as
electronic wire, or through informal channels, such as money or goods carried across borders.

Understanding remittances

Payment remittances are money transfers made by people to another party. They can be made
to satisfy an obligation such as a bill payment or an invoice when someone shops online. But
they are most commonly made by a person in one country to someone in another. Most
remittances are made by foreign workers to family in their home countries. They may also be
payments that are made to a business. The most common way of making a remittance is by
using an electronic payment system through a bank or money transfer service such as Western
Union. People who use these options are generally charged a fee, but transfers can take as little
as ten minutes to reach the recipient.

The importance of remittances is in the role they play in economies. They help poorer
recipients meet basic needs, fund cash and non-cash investments, finance education, foster
new businesses, service debt and essentially, drive economic growth. Empirical studies show
that the primary benefits of remittances to recipient households is the improvement in their
general welfare. According to analysts, 70% of remittances are used for consumption purposes,
while 30% of remittance funds go to investment related uses.

Remittances play an increasingly large role in the economies of small and developing countries.
They are also seen as an important part of disaster relief and often exceed official development
assistance (ODA). Remittances are often used as a way to help raise the standard of living for
people abroad and help combat global poverty. In fact, since the late 1990s, remittances have
exceeded development aid, and in some cases make up a significant portion of a country's gross
domestic product (GDP). On the plus side, remittances are also used to help those living in less
developed nations open bank accounts, which helps promote economic development.

Types of remittances

The remittances can be classified into four types including Family Remittances, Community
Remittances, Migrant Worker Remittances and Social Worker Remittances.

Family Remittances: It refers to remittances that are sent by individual immigrants working in
the foreign locations to their family, relatives or friends in their home country. These
remittances are sent every month and they assist the families of the migrants to survive. These
remittances also help the poor families to fight against the poverty. The family remittances are
regarded as the major form of remittances across the world where millions of workers are
working hard in distant land away from their home for earning their livelihood.

Community Remittances: It refers to the remittance that is sent by individual immigrants

generally and also includes the remittance sent by various hometown associations to
organisations and communities in their home country. This money has been used for the
developmental activities of communities such as in building infrastructure, church, parks, and
roads. It also offers health care to the poor. The community remittances are also used for
offering health benefits, education; and employment to big communities who need these
facilities in the home countries.

Social Remittances – These remittances basically comprise of various ideas, practices, and social
capital that make up the backbone of many remittances that flows from workers of one country
to another. Thus social remittances assist the traditions and culture of one race or community,
to socialize with the cultures and traditions of another community. Social Remittances help in
the bonding of people and do not have money associated with them.

Migrant worker Remittances – These remittances refers to the cash transfers done by migrant
workers for sending the money to the families, friends and relatives back home. The migrant
worker remittances make up a large chunk of money inflows into home country by the people
who have migrated to foreign locations in the search of money, job or education.

Volume of remittances from five African countries

Africa has one of the world's most mobile populations and Africa nations accounts for a large
and growing slice of the global remittance market. In 2018 , the world bank reported that
remittances to sub _Saharan African migration has been rising steeply in recent years, fuelling
the growth of cross broader

Analysing the volume of remittances from five African countries namely: Egypt,Nigeria,
uganda,senegal,Ghana.

Volume of remittances from Nigeria

According to the available reports obtained reports obtained from the national bureau of
statistics , remittances from Nigerians in diaspora rose from $3.24billion in 2013 to
approximately $25.08 billion in 2018 . this means Nigerians Nigerians diaspora remittances rose
by 126% in 6 years. Thus , over the last six (6) years, Nigerians in diaspora sent an estimated
$96.5 billion to the country.

In recent times , the inflow of diaspora remittances has been on the rise as more Nigerians who
abandon the country in search of greener pastures abroad , send foreign currencies to their
families . for instance , recent statistics showed that Nigeria ranks third in the rating of the
countries with the highest number of express entry invitations to Canada in 2018. Further
breakdown shows that Nigeria’s diaspora remittance inflow accounted for 5.74% of the
country’s Gross Domestic Product. Specifically, in 2013, Nigeria’s remittance was put at 4.31%
to Nigeria’s GDP, while in 2018 it stood at 5.74%. An earlier forecast by
PricewaterhouseCoopers (PWC) shows that the total remittance inflow to Nigeria will grow by
almost double from US$25.08 billion in 2018 to US$34.89 billion in 2023. This suggests that as
more Nigerians desperately leave Nigeria for other countries, remittances inflow is expected to
rise marginally.

A significant chunk of remittances to Nigeria come in from USA, Switzerland, UAE,RUSSIA,

CHINA and among others. The USA is the single most significant contributor of money transfers
to Nigeria accounting for about 30% of all remittances along with Europe.18.

Reasons for volume of remittances from Nigeria.

1. Nigerian has a large number of migrants abroad.

2. Most of Nigeria migrants are skilled and educated.

3. For the well-being of their family.

4.Due to global economic growth especially in the high_income OECD countries .

5. Increase in oil prices

6. Nigeria government floated a US $300 million Nigeria diaspora fund.

7.Introduction of a certificate of capital importation (CCI) by Nigerian government.

Volume of remittances from Egypt

Remittances in Egypt averaged 3228.04USDmillion from 2002 until 2019 , reaching an all time
high of 7098.90USD million in the fourth quarter of 2017 and a record low of 655.20USD million
the first quarter of 2002 . Also, According to available report by the central bank of Egypt
_remittances from Egyptians living abroad have risen to $4.4 billion in July and August 2019 .

Reasons for the remittances.

1. Egyptians is one of the world's leading labour exporting country.

2.Most Egyptians migrants are married thereby making them to send money home.

3.Egypt has a high number of migrant abroad thereby making them to send large amount of
money home.for example, according to official data there are around 9.4 million Egyptians out
of Egypt's 104.2 million total population living abroad.

4. Egyptians migrate largely to oil_producing countries which make them earn large amount of
money and remit large amount of money back home.

Volume of remittances to Ghana.

According to data provided by the bank of Ghana (2014) show that the total annual remittances
flow to the country through formal channel is about $2billion Also, the world bank estimated
that the total remittances to Ghana in 2015 was USD$2.008billion.major countries of origin of
remittances to Ghana are Netherlands, Canada, Germany, Italy, Usa , Nigeria e.t.c.

Reasons for volume of remittances from Ghana.

Volume of remittances from Senegal

In 2018, Senegal received an estimated US$2.69 billion in remittances, representing 13% of the
country’s GDP. Households in Senegal have an increased income of close to 60% compared to
those who don’t receive funds from abroad. These numbers are important given that, according
to data compiled by the IOM Dakar Office, 50% of remittances are used for day to day
expenses, 25% for savings and 20% for real estate investments. The other 5% goes to
productive investment, but it could be argued that a higher volume of foreign income could
garner bigger investment budgets.

Reasons of volume of remittances from Senegal.

With 60% of the population being younger than 25, a case could be made that Senegal counts
with a solid incoming workforce. Yet, the dire economic circumstances and limited job
opportunities have left the dependency ratio at 85%, meaning almost the entire population
depends on somebody else financially.

This is one of the main reasons that motivate migration as Senegalese adults need better job
opportunities and their Remittance have contributed alot to their Economy as stated above.

Volume of remittances from Uganda

Uganda was the second and sixth largest to receive remittances in eastern and sub-Saharan
Africa, and she saw her remittances grow from $1.1b in 2017 to $1.2b in 2018, contributing at
least 4.5 per cent of the country’s gross domestic product. Bank of Uganda indicated that half
of Uganda’s remittances currently come from the Middle East, where the country is estimated
to have at least 150,000 workers. Projections indicate that remittances into sub Saharan Africa
will keep increasing but at a lower rate to $48b by 2019 and $51b by 202

Reasons for volume of remittance to Uganda.

The slow pace is attributed to a slowdown in growth of advanced economies due to weak
exports. The report also indicates that the cost of sending money, especially to sub-Saharan
Africa continues to be an impediment to remittance inflows.

According to the report, the average cost of sending $200 to sub-Saharan countries averaged at
9 per cent in 2018. For instance, sending money from Tanzania to Uganda is tallied among the
highest cost corridors attributed to high transfer fees at 16 per cent and 1 per cent in forex
exchange margins.

Banks rank as the most expensive means of sending remittances at an average cost of 10 per
cent in the first quarter of 2019, whereas post offices and money transfer operators charged an
average of 5.5 per cent and 6.2 per cent, respectively. The report also highlights national post
offices as the possible solution to the high cost of sending remittances. “Opening up national
post offices, national banks and telecommunication companies to partnerships with other
money transfer operators could remove entry barriers and increase competition in remittance
markets,” the report reads in part. The report comes at a time when some political leaders are
asking government to ban labour export to curb cases of trafficking and human rights abuse.

Similarities between these countries.

1. It contributes to the GDP of these African countries.

2.most of these countries remittances are used for consumption.

3.There is a similar poor political and Economic policies in these countries thereby making there
citizens to seek for greener pastures abroad

4.They make use of online transfer to their countries..

.5.it is a Major source of income for their families.

6.majority of these migrants that travels abroad were jobless in their countries.

Difference between these countries.

1. Some countries volume of were were higher than some because some of the migrants from
such countries are educated and skilled than other countries.

2.Despite the fact that these countries remittances contributes to their GDP. The remittances
contributes to the GDP of some countries than others.

3.some countries policies favour sending of remittances to their countries unlike some
countries. For instance recently, Nigeria invested in floating a US $300 million Nigeria diaspora
bond

In conclusion,