Galway West TD Noel Grealish has claimed in the Dáil that €3.54 billion in remittances has been sent from Ireland to Nigeria in the last eight years, citing the World Bank as his source.
However, just six weeks ago, Dáil records show Mr Grealish was given data from the CSO which says the flow to Nigeria is only €17 million a year for the same period, or €136 million – just 3.8 per cent of the figure offered by the Galway West TD.
There are 13,079 Irish-Nigerians or Nigerians living in the state, according to census data. World Bank data suggests each one is sending almost €34,000 a year to Nigeria. Using the CSO measure, it’s around €1,300 per year.
So, which one is more likely to be a good measure of remittances and why is there such a gap between the figures?
Nobody fills in a form every time they send a remittance home and lodges it with the CSO. This makes counting remittances very hard, because there's no direct data source. Organisations like the World Bank and the CSO use what are called "indirect data sources" to estimate how big these cash flows might be.
How do the CSO measure this?
The CSO have said their methodology is in line with international best practice. They base their estimates on data from the revenue commissioners which shows how much foreign nationals earn. They use that to estimate disposable income, and then from that they calculate a likely remittance amount.
What about the World Bank?
The World Bank acknowledges, much like the CSO, that there are estimates and logical assumptions involved in its calculation of remittances. It uses data on the number of migrants in various destination countries, and the GDP per capita in both host and home countries. There are, however, problems in using these measures. Generally, developing countries struggle to provide accurate estimates of their diaspora numbers and where they are. Meanwhile, Irish GDP is artificially high, so it can give an out-sized indication of the wealth and remittance capacity of migrants living here.
So whose data is more accurate?
It is clear there is no perfect measure of remittances, but there have been well-published problems with the World Bank data. In 2013, Michael Noonan said the data "are open to serious scrutiny and the real figure may be a fraction of the published figure". The World Bank itself has said there are "numerous challenges in compiling remittance-related data and making it more usable to underpin analysis".
In 2015, authors from the International Organisation for Migration wrote that there is a “a question regarding what we can actually know about migrant remittances, and remittances at large, given the debatable nature of the parameters commonly used to craft remittance statistics”.
What can be said is that, while measuring remittances is hard, the CSO is closer to Irish-specific issues such as the distorting effect of GDP. It’s also the case that Independent TD Noel Grealish had both sets of data to hand, yet only chose to present a single figure – the significantly larger one – to the Dáil on Tuesday.
Is there a risk remittances could be used for financial crime?
The short answer is yes. Money remittance firms are ranked as high-risk in the state's national risk assessment for money laundering and terrorist financing. Organised crime gangs use these networks, which often involve large cash transactions, to distribute and launder the proceeds of crime, including serious crimes like human trafficking. It is also a "highly lucrative area for banks and money remittance firms", according to Peter Oakes, a former head of enforcement at the Central Bank and now an advisor to many payments firms. Identification standards, he says, have improved in recent years, with all firms requiring at least one proof of address and government-issued ID.
About 15 companies are authorised by the Central Bank as payment institutions. The company with the biggest network in Ireland is undoubtedly Western Union, with hundreds of outlets (operated under licence) around Ireland. In 2015 the Central Bank fined Western Union €1.75 million for breaches of the Criminal Justice (Money Laundering and Terrorism Finance) Act.
The Central Bank found that Western Union in Ireland had failed to demonstrate it had sufficiently robust policies and procedures for anti-money laundering and for countering the financing of terrorism.
In particular it pointed to its outsourcing of these functions to Lithuania, as well as failures in customer due diligence, and the induction and training of retail agents.
Moreover, it did not have adequate systems for monitoring and identifying suspicious activity. The company resolved the issues to the Central Bank’s satisfaction after that.
There is no evidence to suggest cash flows from Nigerians in Ireland would be particularly vulnerable over and above those from other nationalities.