World Bank projects the remittances to Nigeria, Egypt, Senegal and other Low and Middle-income Countries (LMICs) to drop sharply by 19.7% to $445 billion in 2020.
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The World Bank Group defined LMICs as low-income economies ($1,005 or less GNI per capita) or as lower-middle-income economies ($1,006 to $3,955 GNI per capita).
The decline, according to the global lender would be the sharpest decline seen in recent history. This is largely caused by a drop in wages and the rate of unemployed migrant workers that are usually victims of economic crisis in a host country.
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According to the reports from World Bank, remittance is beneficial to LMICs because it reduces the poverty rate in these countries and also reduces child labour in disadvantaged homes.
The rate of remittance is expected to fall as shown below:
- Europe and Central Asia – 27.5%
- Sub-Saharan Africa – 23.1%
- South Asia – 22.1%
- The Middle East and North Africa – 19.6%
- Latin America and the Caribbean – 19.3%
- East Asia and the Pacific – 13%
The report notes that large economies such as the European Union, the United States, the Middle East, and China which were worst hit by the coronavirus outbreak are among the key destinations hosting a good number of Sub-Saharan African migrants.
Most Sub-Saharan African migrants work in these regions of large economy and contribute heavily to the remittances in the already mentioned regions including Nigeria and other African countries.
According to the President of World Bank Group, David Malpass;
“Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies.
“Remittances help families afford food, healthcare, and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs.”
Meanwhile. the World Bank is working with the G20 countries and the global community to reduce remittance costs and improve financial inclusion for the poor residing in most regions of the world.
The World Bank therefore, is advocating for quick and more efficient means to send and receive remittances into Africa and other affected regions.
