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Sub-Saharan Africa to suffer 23.1% decline in remittances in 2020 – World Bank

Report by Elliot Smith

Key Points:

  • Remittance flows to low and middle-income countries (LMICs) are projected to fall by almost 20% in 2020, one of the sharpest declines in history, according to the World Bank.
  • Sub-Saharan Africa is projected by the World Bank to suffer a 23.1% decline in remittances over the course of 2020. The region has the highest remittance costs, with the average transfer of $200 charged at about 9%.

The coronavirus pandemic is leaving migrant workers unable to send money or goods home to families, cutting off a vital lifeline for communities already under siege from a barrage of external shocks.

Remittance flows to low and middle-income countries (LMICs) are projected to fall by almost 20% in 2020, one of the sharpest declines in history, according to the World Bank.

The coronavirus pandemic has led to mass unemployment and hammered wages in the U.S. and Europe, key destinations for migrant workers, leaving many unable to send money home.

A number of major European countries have introduced furlough schemes to partially subsidize wages for those unable to work, but many of those in less formal employment have still found themselves without income. For workers in the U.S., there is less of a social safety net, which has led to more than 40 million Americans filing for unemployment since the pandemic was declared in mid-March.

Sub-Saharan Africa is projected by the World Bank to suffer a 23.1% decline in remittances over the course of 2020. To compound the tighter financial conditions for African migrant workers, in the first quarter of 2020, the region continued to have the highest average remittance costs, with the average transfer of $200 charged at about 9%.

Even for those who have maintained the financial capability to transfer money, lockdown measures have impacted access to MTOs (money transfer operators) in receiving countries.

Oxfam and around 90 other NGOs, academics and aid workers recently penned a letter to international bodies documenting the impact of the plunge in remittance payments in Somalia, in particular.

The letter urges the U.S. and European governments to take urgent action to facilitate wiring

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