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Surge in remittances as Africa’s battle with COVID-19 continues

By , Sub Saharan Africa Business, Tech, News and Development Journalist
Africa , 18 May 2021

Research by the World Bank, in partnership with Knomad, confirms an increase in remittance flows into Sub-Saharan Africa, excluding Nigeria.

Referencing growth on its mobile money platform, mobile operator MTN said this week that the “the total value of remittance grew by 160.5% to $552 million in the first quarter of 2021 alone.

On a year-on-year basis, the value of remittance receipts through M-Pesa grew by 54.5% for the full year period to end March. The platform has also signed a partnership to link PayPal to M-Pesa accounts.

A statement by Safaricom reads: “The service has continued to gain momentum and current partnerships include: Western Union, MoneyGram, Ria, WorldRemit, Wave, Remitly among others.”

There are now more digital channels offering remittance delivery straight into bank and mobile wallet accounts.

In Zimbabwe, Cassava Smartech offers the option to receive remittances straight into mobile wallets while Ecobank, among other finance institutions in the region, also offers remittances in partnership with mobile wallets or into its accounts.

Knomad and the World Bank say the onset of COVID-19 and its subsequent impact on traditional remittance delivery channels has brought on “renewed interest in understanding the impact of crises on remittance” flows.

Research states: “Some countries, such as The Gambia, Somalia, and Zimbabwe, reported an increase in the volume of remittances collected by their central banks while household survey data showed a decrease.”

According to the May 2021 report, titled Resilience: COVID-19 Crisis Through a Migration Lens: “The remittances industry has participated in the rapid acceleration of digitalisation that is observable in multiple dimensions of firms’ and house-holds’ reactions to the COVID 19 crisis.”

The GSMA says cross-border remittances processed via mobile money increased by 65% in 2020 to US$12-billion in 2021. This translates to a global value in transactions sent and received of US$1-billion each month.

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