- The anti-poverty organization ONE and the United Nations Economic Commission for Africa (ECA), in a recent report titled “Preserving remittances in the time of COVID-19’, has highlighted the severe drop in remittance inflows to Africa.
- In 2020, the decline in remittances is expected to reach 21% or $18 billion less than in 2019, that is dropping from $85 billion in 2019 to $67 billion this year.
The sharp decline of remittance flows to Africa has got the United Nations Economic Commission for Africa worried. With the prolonged global economic crisis and COVID 19, African Diaspora is sending less money home because migrant workers are the first victims of the economic crisis facing job losses.
The anti-poverty organization ONE and the United Nations Economic Commission for Africa (ECA), in a recent report titled “Preserving remittances in the time of COVID-19’, has highlighted the severe drop-in remittance inflows to Africa. In 2020, the decline in remittances is expected to reach 21% or $18 billion less than in 2019, that is dropping from $85 billion in 2019 to $67 billion this year.
Over the past few decades’ remittances had become the financial lifeline for developing countries, particularly Africa, surpassing foreign aid, private capital flows and foreign direct investment. For example, in Mali, remittances account for more than 7% of the gross domestic product.
The Economic Commission for Africa has urged the countries of the North to reduce bank fees related to money transfers. The Commission has calculated that the average cost in the world for sending 500 dollars is 5%, and rises to 7% for a transfer of 200 dollars to some countries against the 3% set by the UN in its objectives of sustainable development. In 2017, the banks earned $30 billion in commission on money transfers. The Commission strongly recommends financial institutions to reduce money transfer fees to zero during this pandemic period. Additionally, the UN is urging all countries to include migrants in their social protection provision to enable them to support their relatives back home in Africa.
