The United Nations Economic Commission for Africa is concerned about the decline in remittances from African diasporas. With the global economic crisis, these diasporas are sending less money to the countries of origin. This year, the decline is expected to reach 21% or 18 billion. Dollars less compared to 2019.
The forecasts are alarming. Transfers will go from $ 85 billion in 2019 to $ 67 billion this year. And for many families living in anticipation of the manna sent by parents who have gone “north,” this is a problem. In Mali, diasporic transfers account for more than 7% of gross domestic product. In the Comoros, 20 to 30% of household income consists of funds sent from Europe. Suffice it to say that a drop in money transfers is bad news for millions of people.
The explanation for this phenomenon is simple: migrants are among the first victims of the economic crisis affecting all economies, with the notable exception of China. When there is a shortage of work, or when states do not adequately support workers with social benefits, remittances abroad fall. This is what’s happening right now.
Millions of migrant workers find themselves unemployed or with declining incomes, as is the case in Europe, the Gulf countries or the United States. Result, after more than a decade of growth, remittances from African diasporas are declining.
The UN calls for a reduction in the fees associated with these transfers
For the Economic Commission for Africa, it is urgent that the Nordic countries reduce bank fees related to money transfers. At the moment, the costs are huge. The Commission has calculated that the world average cost of a shipment of $ 500 is 5% or $ 25. It rises to 7% for a shipment of $ 200. We are far from the 3% that the UN has set in its goals for sustainable development.
Ideally, the Commission believes that financial institutions supported by governments will reduce money transfer fees to zero during this pandemic period. In 2017, banks earned $ 30 billion in commissions on these transfers. In addition, the UN encourages all countries to include migrants in their offer of social protection so that they can continue to help their relatives in Africa.
Finally, governments need to consider money transfer companies in so-called “significant” activities so that “they can remain active during periods of confinement”.