By Emma Ujah – Abuja
The World Bank has predicted a 14 per cent fall in global remittance flows in 2021, due to the impact of the COVID-19 pandemic on global economy.
“As the COVID19 pandemic and economic crisis continues to spread, the amount of money migrant workers send home is projected to decline 14% by 2021 compared to the pre COVID19 levels in 2019,” the bank said in its latest Migration and Development Brief.
The bank said that Sub-Saharan Africa would suffer a 9 per cent decrease in remittance flows in 2020.
The world body said, “Remittances to Sub-Saharan Africa are expected to decline by around 9 per cent in 2020 to $44 billion.
“Within the region, remittances to Kenya have so far stayed positive, though flows are likely to eventually decline in 2021. All major remittance-receiving countries will likely see a decline of remittances.
“As the COVID-19 pandemic affects both destination and origin countries of Sub-Saharan migrants, the fall in remittances is expected to further lead to an increase in food insecurity and poverty.”
On cost, the bank said Sub-Saharan Africa was the costliest region to send remittances to.
It said, “Sending $200 remittances to the region cost on average 8.5 per cent in the third quarter of 2020, representing a modest decrease compared with 9 per cent a year ago.
“The promotion of digital technology, combined with a regulatory environment promoting competition in the remittances market and review of Anti-Money Laundering/Combating the Financing of Terrorism ( AML/CFT) regulations, are essential to lowering remittances fees for the region.”
Nigerians in the Diaspora have been sending an average of $25 billion annually, lately.
The bank projected that remittance flows to low and middle-income countries (LMICs) to fall by 7 per cent, to $508 billion in 2020, followed by a further decline of 7.5 per cent, to $470 billion in 2021.
“The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar,” it said.
“The impact of COVID-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances,” said Mamta Murthi, Vice President for Human Development and Chair of the Migration Steering Group of the World Bank.
He added, “The World Bank will continue working with partners and countries to keep the remittance lifeline flowing, and to help sustain human capital development.”
The bank said that the declines in 2020 and 2021 would affect all regions, with the steepest drop expected in Europe and Central Asia (by 16 per cent and 8 per cent, respectively), followed by East Asia and the Pacific (11 per cent and 4 per cent), the Middle East and North Africa (8 per cent and 8 per cent), Sub-Saharan Africa (9 per cent and 6 per cent), South Asia (4 per cent and 11 per cent), and Latin America and the Caribbean (0.2 per cent and 8 per cent).