Despite COVID-19, Africa Records $80bn Diaspora Remittances
Diaspora remittances to Africa as a whole have increased to over $80 billion despite the COVID-19 impact on economies worldwide, and against the backdrop of a fall in remittances worldwide.
However, remittances to Nigeria dropped by 27.7 percent in 2020, largely caused by COVID-19, according to a report by Bird, a news agency.
Diaspora remittances to Africa as a whole withstood an onslaught from COVID-19 shocks in 2020, growing over $80 billion on the back of fiscal stimulus extended to workers in remitting countries like the United States and Europe, according to the World Bank.
This runs counter to trends that saw remittance inflows into low-and middle-income states worldwide shrink by $8bn in 2020, due to the economic fallout from coronavirus lockdowns.
Remittance growth was prevalent in Zambia, at 37 percent, Mozambique at 16%, Kenya at 9% and Ghana at 5%, according to the report.
Flows to Egypt soared 11% to a record high of nearly $30bn in 2020, while transfers to Morocco jumped 6.5% to $7.05bn.
“The resilience of remittance flows is remarkable. Remittances are helping to meet families’ increased need for livelihood support. They can no longer be treated as small changes.
Globally, remittance flows to low-and middle-income nations slid to $540bn in 2020, just 1.6% below the 2019 total of $548bn, according to the Migration and Development Brief.
This was a smaller drop than during the 2009 global financial crisis (at 4.8%) and far lower than the fall in foreign direct investment (FDI) flows to low-and middle-income countries, which, excluding flows to China, fell by over 30% last year.
According to the World Bank, the negative trend resulting from COVID-19 shocks is about to substantially reverse globally. “With global growth expected to rebound further in 2021 and 2022, remittance flows to low-and middle-income countries are expected to increase by 2.6% to $553bn in 2021 and by 2.2% to $565bn in 2022.”
Remittances to Nigeria are also projected to bounce in 2021 and 2022 after a decline last year. Cash wired to Nigeria by its citizens abroad, including the United States and Europe fell 27.7% in 2020 to $16.8bn from $23.24bn in 2019, due to COVID-19-induced economic shocks. A global recovery is expected to see that figure soar this and next year.