COVID-19 hits Malawi’s remittance market hard
Malawi has recorded a 33% drop in remittances from Malawians working or living abroad.
This is according to the Reserve Bank of Malawi (RBM) which stated that in the last five months, remittances have dropped to US$78.96-million from US$118.03-million received during the same period last year.
RBM spokesperson Mbane Ngwira said the drop is largely due to the economic crisis triggered by the COVID-19 pandemic and lockdowns in some countries which has resulted in a reduction in wages and employment of migrant workers.
As in many other African countries, including Zambia, the fall in remittances in Malawi represents a loss of crucial financing lifeline for many vulnerable households.
Ngwira added: “We have a significant drop in the amount of funds the country receives through remittances. This practically means that we may not reached our target for 2020 of US$300 million.”
In April this year, the World Bank warned that remittances to Sub-Saharan Africa isexpected to decline by 23.1% from US$48-billion in 2019 to US$37-billion in 2020, due to the COVID-19 crisis.
The Bank warned that due to the pandemic, countries would face the challenge of high cost of sending remittances.
According to the World Bank’s Remittance Prices Worldwide database, the global average cost of sending US$200 stands at around 7%, but that Sub-Saharan African countries continue to have the highest average cost at 9%.
In a statement released in June 2020, the Common Market for Eastern and Southern Africa (COMESA) said within the Eastern and Southern Africa region, leading recipients of remittances are Egypt, Kenya, Tunisia, DRC and Zimbabwe.
COMESA director of Trade and Customs Dr. Christopher Onyango said, “Migrants in the diaspora have lost jobs and taken pay cuts amidst the coronavirus outbreak and subsequent lockdowns leading to drastic fall in remittances. Thus, many countries have suffered a double blow more so those that remittances constitutes a significant share of the GDP.”