Remittance to Africa expected to fall in 2021 due to Covid - Report
Remittances to African countries are expected to decrease 5.4 percent from $44 billion in 2020 to a projected total of $41 billion this year due to the effects of Covid-19 pandemic, according to the Continental Migration Report 2021.
The newly published report, entitled "African Regional Review of Implementation of the Global Compact for Safe, Orderly and Regular Migration," was produced by the UN Economic Commission for Africa (UNECA) in partnership with the African Union (AU) Commission (AUC).
It, however, emphasized that remittances have demonstrated greater resilience and reliability as a source of capital in Africa than foreign direct investment flows, read the summary of the report shared by the UNECA Monday.
The report is based on four sub-regional reports compiled by the AU and a summary from stakeholder consultations at the just concluded 2021 African regional review meeting on the Global Compact for migration that was held from August 26 to September 1 in Morocco, it was noted.
According to the report, the costs associated with sending remittances to Africa are some of the highest in the world. The report indicated that a number of African countries have taken action to lower the costs of remittance transfers, in which some countries also offer diaspora bonds to investors and have relaxed foreign exchange controls to allow for electronic and mobile money transfers at reduced costs.
"It should be noted, in that regard, that the use of digital money transfer platforms reduces transfer fees in Africa by an average of 7 percent," said the report, calling on governments across the world to take effective action to facilitate and boost remittances in view of supporting the fight against Covid-19 and ultimately building a more sustainable post-pandemic world.
Remittances are estimated to constitute approximately 65 percent of the income of some receiving countries and senders spend an estimated 15 percent of their income on remittances.