The remittance cost in Sub-Saharan Africa remains the highest average cost at 8.2 percent against the global average cost of 6.5 percent, which is higher than the 3 percent target of the Sustainable Development Goal (SDG).
This was revealed in a report released by the global financial institution, the World Bank, on Wednesday.
In the report headlined, ‘Defying Predictions, Remittance Flows Remain Strong During COVID-19 Crisis’, the bank noted that global remittances were impacted by the advent of the coronavirus pandemic.
The report for 2020 noted that there was a slight decline in remittance flows globally at $540 billion against the $548 billion reached in 2019 (1.6 percent decline).
Apart from Nigeria, other countries in the Sub-Saharan region saw a 2.3 percent increase in remittance flows, while as a whole, the region recorded a drop of 12.5 percent.
Remittance inflows across the globe are as follows:
Latin America and the Caribbean: increase of 6.5 percent;
South Asia: increase of 5.2 percent;
Middle East and the Pacific: increase of 7.9 percent.
Remittance Effects On the Poor
Speaking on the report, the Global Director of the Social Protection and Jobs Global Practice at the World Bank, Michal Rutkowski, said that remittances remain the life support for the poor and vulnerable.
Rutkowski said, “As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable.
“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants.”
The report added that the resilience of remittance flows globally highlighted the need for a comprehensive collection of data on remittances.
It said, “The relatively strong performance of remittance flows during the COVID-19 crisis has also highlighted the importance of timely availability of data.
“Given its growing significance as a source of external financing for low- and middle-income countries, there is a need for better collection of data on remittances, in terms of frequency, timely reporting, and granularity by corridor and channel.”
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Emphasising the importance of remittances to the vulnerable section of countries, the lead author of the report on migration and remittances and head of KNOMAD, Dilip Ratha, said, “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 change. The World Bank has been monitoring migration and remittance flows for nearly two decades, and we are working with governments and partners to produce timely data and make remittance flows even more productive.”
The World Bank said that it was working with member countries in monitoring remittance flow “through various channels”.
In an earlier report, the bank estimated a growth of 5.6 percent in global remittance inflows in 2021 to $470 billion.
It added that households in countries in the Pacific Islands that were described as “remittance-dependent” countries were at risk as remittance incomes fell.
The cost of sending $200 remittances to the Sub-Saharan region fell in the first quarter of 2020 at 8.9 percent, compared to the 9.25 percent recorded the year prior.
Remittance costs in the Southern African region are the most expensive, as costs go as high as 20 percent, the report stated.
“Sending $200 remittances to the region cost 8.9 percent on average in the first quarter of 2020, a modest decrease compared with the average cost of 9.25 percent a year before,” it said.
“The most expensive corridors are observed mainly in the Southern African region, with costs as high as 20 percent. At the other end of the spectrum, the less expensive corridors had average costs of less than 3.6 percent.”
