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World

Coronavirus:

Disappearing migrant remittances

to developing countries

emittances which are private constitutes approximately 2 percent crisis in richer countries to poorer
Rtransfers sent by migrants to their share of Africa’s GDP. countries. They will fundamentally
families back home directly affect the shape how, and the pace at which, the
incomes and livelihoods of households In Kenya, for instance, remittances have world recovers from coronavirus.
at a micro level. Several studies have steadily increased at an average annual
confirmed that families that receive rate of 14.3 percent in the last one Remittances shelter a large number
migrant remittances access better health decade, rising to US $ Sh2.8 billion last of poor and vulnerable households,
facilities, have better education, high year, constituting 2.5 percent of GDP. underpinning the survival strategies
financial access and low poverty levels Kenya is one of the top eight highest of over 1 billion people. In 2019, an
than households who do not receive remittance-recipient countries in Africa estimated 200 million people in the
remittances. Moreover, remittance after Nigeria, Egypt, Morocco, Tunisia, global migrant workforce sent home
flows through normal channels provide Ghana, Algeria and Senegal. US$715 billion (£571 billion). Of this, it’s
opportunities for encouraging savings, Remittances to Kenya have been estimated US$551 billion supported up
increasing deposits and deepening consistently increasing, recording higher to 800 million households living in low
financial inclusion and development levels than foreign direct investment and middle-income countries.

Remittances to Africa steadily increased and portfolio equity flows. Remittances The majority of remittances are small
over the last decade leading to a in Kenya are now the biggest source of sums of money, spent by recipients on
reassessment of its importance against foreign exchange, ahead of tourism, tea, everyday subsistence needs including
other capital flows in policy debates, coffee and horticulture exports. Recently food, education and health. The World
academic circles and even among the remittances have become the largest Bank projects that within five years,
researchers. This gained renewed contributor to forex reserves, which the remittances will outstrip overseas aid
impetus following the global financial Central Bank of Kenya (CBK) uses to and foreign direct investment combined,
crisis when remittances proved to be the stabilize the currency. reflecting the extent to which global
only resilient and steady capital flow to As the coronavirus pandemic hits jobs financial flows have been reshaped by
most developing countries. and wages in many sectors of the global migration.
Remittances to Africa surged from US $ economy that depend on migrants, But the social distancing and lockdown
56.8 billion in 2011 to US $ 66.9 billion a slowdown in the amount of money measures used to contain the spread
in 2014 against a total amount of US these workers send back home to their of coronavirus have led to a global
$ 58.3 and US $ 54.5 in foreign direct families looks increasingly likely. These economic slump, with the International
investment and official development international remittances will be crucial Monetary Fund predicting the global
assistance, respectively, in 2014. This in transmitting the unfolding economic economy will contract by 3% in 2020.

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